Saudi Arabia’s sovereign wealth fund is reportedly set to take nearly full control of U.S.-based video game giant Electronic Arts (EA), marking one of the largest buyouts in the gaming sector. According to the Wall Street Journal (WSJ), a recent filing shows the Public Investment Fund (PIF) would hold 93% of EA, with investment firms Silver Lake and Affinity Partners owning 5.5% and 1.1%, respectively.
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In September, PIF partnered with technology-focused buyout firm Silver Lake and Jared Kushner’s Affinity Partners to acquire Electronic Arts in an approximately $55 billion deal, including debt.
More Details about the Acquisition
As the largest stakeholder, PIF shoulders most of the funding responsibility. The consortium is financing the deal with $36.4 billion in equity and $20 billion in debt. PIF is rolling over an existing $5.2 billion EA stake, meaning it must contribute roughly $29 billion in new cash to secure its final ownership share.
PIF also holds significant investments in Silver Lake and Affinity funds, increasing its financial exposure if the acquisition does not perform as expected.
Interestingly, PIF’s outsized stake in the buyout is unusual. Sovereign wealth funds typically invest as minority partners alongside experienced private equity (PE) firms, which bring expertise in structuring deals and managing acquired companies.
What the EA Buyout Means for Investors
For EA investors, the buyout signals a major shift. Once the deal closes, EA will likely go private, removing its stock from public markets. Shareholders who stay in until the acquisition could receive a premium for their shares, but they will no longer have access to future public trading gains.
The move also means EA’s strategic decisions will be driven primarily by PIF and its consortium partners, which could impact growth priorities, investments, and dividend policies. Meanwhile, the deal highlights strong investor interest in EA’s gaming portfolio, leaving investors to weigh potential opportunities and risks from this major ownership change.
Is EA Stock a Good Buy?
Turning to Wall Street, the analysts’ consensus rating for Electronic Arts’ stock is Moderate Buy, based on two Buys, 15 Holds, and one Sell assigned over the past three months. The average EA stock price target of $203.63 implies a potential 7.2% downside risk.
