The $55 billion leveraged buyout which will see Saudi Arabia, Silver Lake and Jared Kushner become the new owners of EA will reportedly lead to the Saudi Public Investment Fund owning a whopping 93.4 percent of the game publishers. That’s assuming the deal goes through as planned.
This is according to filings with Brazil’s antitrust regulator reported by the Wall Street Journal (paywall). The other parties in the takeover, investment firms Silver Lake and Affinity Partners, are set to receive stakes amounting to 5.5 percent and 1.1 percent respectively.
The latter company was founded by Jared Kushner, US President Donald Trump’s son-in-law. Both Silver Lake and Affinity already get some of their own investment funding from Saudi Arabia.
Overall, the Saudi PIF are putting up somewhere in the region of $29 billion to make the deal happen, with $36.4 billion of the $55 billion cost funded in equity, plus the $5.2 billion worth of EA already owned by the country’s wealth fund. The remaining $20 billion will come from a loan set to be dished out by JPMorgan Chase Bank, with generative AI reportedly being viewed as a way of repaying the debt by slashing EA’s running costs in the coming years. Sigh.
All of that’s a serious chunk of change for a fund recently reported by the New York Times to be dealing with some “financial distress”. Though, the fund did disagree with that assessment of their money future, casually declaring that they’ve got $60 billion in cash and “similar financial instruments” in their wallet.
The question, given how much control of Saudi Arabia stand to gain over EA’s direction for owning 93.4 percent via the PIF, is whether there’s any truth to claims that EA’s day-to-day will go on largely as usual, following the deal. “Our values and our commitment to players and fans around the world remain unchanged,” EA CEO Andrew Wilson said in October.
Saudi Arabia’s ruling regime, led by Mohammed bin Salman, boast a terrible human rights record which Amnesty International cite as including “arbitrary” detention and execution of people simply expressing their opinions, abuse of migrant workers, and discrimination against women. They’re also believed by the CIA to have been responsible for the murder of journalist Jamal Khashoggi. All of that makes the wealth fund gaining majority control of the games publisher worrying, especially given the diversity and inclusiveness studios like BioWare and series like The Sims are noted for.