Saudi Sovereign Fund Set to Acquire 93.4% of Electronic Arts Following $55 Billion Buyout

Three entities are acquiring Electronic Arts from the exchange for $55 billion: the Public Investment Fund of Saudi Arabia and two American investment firms, Silver Lake and Affinity Partners. Initially, the distribution of shares was unclear, but it has since been revealed that one company will gain significantly more than the others.

According to the Wall Street Journal, should the acquisition succeed, the Saudi sovereign fund will own 93.4% of Electronic Arts. In light of this overwhelming stake, the shares held by the other two participants in the buyout appear minimal. Silver Lake will secure 5.5% of the equity, while Affinity Partners will have an even smaller share at just 1.1%.

It’s also crucial to point out that the PIF is a notable investor in both of these firms. Therefore, it is fair to say that the Saudis will largely control Electronic Arts and its assets.

Moreover, information from Brazil’s antitrust regulator has revealed that out of the total $55 billion, $36.4 billion will be covered by shareholders’ equity, while the remaining $20 billion will be financed through borrowed funds. After subtracting the existing $5.2 billion share of the Saudi Fund in EA, media reports suggest that the PIF allocated «around $29 billion» for the publisher’s buyout.

The actions of the Public Investment Fund of Saudi Arabia create the impression that it has virtually limitless resources. However, recent rumors suggest that the PIF might be feeling less secure financially. This is attributed to the excessively costly projects undertaken by the Fund, such as the construction of the futuristic city of Neom and the building of stadiums for the 2034 World Cup.

Nevertheless, the PIF likely still possesses substantial funds, but EA will probably need to manage a significant portion of the debt resulting from its own acquisition.