Videogame powerhouse Electronic Arts (EA), the maker of the Battlefield franchise, announced Monday it will be taken private in a landmark $55 billion leveraged buyout (LBO). The deal, which sets a new record for the largest LBO ever, is being orchestrated by a consortium that includes private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Jared Kushner’s Affinity Partners.
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The massive transaction underscores deep-pocketed investors’ conviction in the enduring value of blockbuster game franchises as the industry begins to recover from a slump.
The $55 billion valuation for the take-private offer, with an equity value of $52.5 billion, eclipses the 2007 takeover of TXU Energy and other mega-transactions from that decade. It arrives amid a rebound in global dealmaking, fuelled by easing borrowing costs that are reviving appetites for such complex transactions.
Under the terms of the deal, EA shareholders will receive $210 per share in cash. This represents a 25% premium over the company’s closing price on September 25, just before reports of the acquisition surfaced.
The LBO comes at a crucial time for EA, which is relying heavily on its core portfolio of sports titles and action shooter intellectual property to navigate a sluggish period where gamers are becoming more discerning with their spending. The company is currently gearing up to launch the highly anticipated Battlefield 6.
The $55 billion transaction will be financed through a combination of equity and debt:
- Equity: Approximately $36 billion in cash from PIF, Silver Lake, and Affinity Partners, along with a rollover of PIF’s existing stake in EA.
- Debt: $20 billion in committed debt financing from JPMorgan, with $18 billion expected to be funded at the close.
While the $210 per share offer seems compelling, analysts from Benchmark believe the offer “falls materially short of the company’s intrinsic value.” They argue that with Battlefield 6 launching and a pipeline expected to add more than $2 billion in incremental bookings by FY28, EA’s true earnings power is only beginning to emerge, driven largely by its globally popular sports portfolio and consistent in-game spending revenue.
The deal is expected to close in the first quarter of the 2027 financial year. Both sides are subject to significant termination fees:
- EA: Must pay $1 billion if it accepts a higher bid, pursues an alternative deal within a year of shareholder rejection, or terminates the merger due to a board reversal.
- Consortium: Owes the same $1 billion if the agreement is breached or if regulatory delays push completion past September 28, 2026.
