Summary
- Jared
Kushner’s firm leads $55 billion Electronic Arts buyout. - Saudi
Arabia’s Public Investment Fund is a major investor. - Deal
values EA shares at $210 each, 25% premium. - Largest-ever
leveraged buyout of a public company.
The most leveraged buyout in history, the deal, is headed by
Jared Kushner, the husband of Ivanka Trump, and is expected to pay shareholders
$210 per individual share.
Silver Lake, Jared Kushner’s Affinity Partners, and Saudi
Arabia’s Public Investment Fund will all be involved in the huge sale.
Some of the most well-known video games in the world, such
as Titanfall, Plants vs. Zombies, and The Sims, were made by Electronic Arts.
Additionally, it owns EA Sports, which creates some of the
largest sports brands in the gaming business, such as the FIFA series until
recently.
Kushner established the investment company Affinity Partners
in 2021 after serving as a key counselor to Donald Trump during his first term
in office.
The business often makes investments in Israeli and American
businesses. The Saudi government provides a sizable amount of its money.
The publication claimed
that his net worth had increased by 180 percent since becoming senior advisor
to Trump in 2024.
Now, the businessman says that he is “excited” about the
sale of Electronic Arts.
“Electronic Arts is an extraordinary company with a
world-class management team and a bold vision for the future.
I’ve admired their ability to create iconic, lasting
experiences, and as someone who grew up playing their games - and now
enjoys them with his kids – I couldn’t be more excited about what’s
ahead,”
he said.
The buyout is expected to close in 2027, during the first
quarter of the financial year.
Andrew Wilson, the brand’s CEO, will remain in post after
the sale goes through.
“Looking ahead, we will continue to push the boundaries of
entertainment, sports, and technology, unlocking new opportunities.
Together with our partners, we will create transformative
experiences to inspire generations to come. I am more energized than ever about
the future we are building,”
he said.
However, some gamers have expressed concerns about the
future of their favourite franchises given the Saudi Kingdom’s stance on
minority rights.
In Saudi Arabia, same-sex relationships are illegal and
cannot be shown on TV, in movies, or in video games.
“The Sims 4 but you get banned if you make a gay sim,”
joked
one unhappy gamer, in a grim prediction for the future of the video game
franchise.
“Crown Prince Mohammed bin Salman has consolidated political
and economic power, including as chairman of Saudi Arabia’s Public Investment
Fund (PIF), a sovereign wealth fund that has facilitated and benefited from
rights abuses,”
wrote Human Rights Watch.
In an attempt to lessen the reliance of its economy on oil
sales, Saudi Arabia has recently diversified its investments.
According to the Saudi General Authority for Statistics and
the IMF, the nation’s enormous oil and gas reserves provide 22.3 percent of its
overall GDP and 55 percent of its government’s revenue.
Following the building of Trump Tower Jeddah, the $1 billion
project will mark the second partnership between the Trump Organization and Dar
Global.
What national security reviews apply to Saudi-backed
takeovers?
CFIUS is an interagency committee led by the Department of
the Treasury and includes representatives from the Department of Defense, the
Department of Commerce, the Department of Homeland Security, the Department of
Justice, the Department of State, and other agencies.
CFIUS reviews transactions resulting in foreign control or a
significant foreign investment in U.S. businesses engaged in, or involved in,
critical infrastructure, critical technology, or the maintenance of sensitive data.
CFIUS considers risk based on the foreign investor’s
identity, motivations, level of control, and effect on U.S. national security
and technological leadership.
If there are un-remediated risks, CFIUS can recommend that
the president of the United States block the transaction. The president has the
ultimate authority to approve or block deals for national security matters.
