Historic $55 Billion Buyout: EA Sells to Investor Consortium

Electronic Arts, the videogame giant behind hits like 'Battlefield' and 'Madden NFL,' is set to change hands in a record-breaking $55 billion leveraged buyout by a group of private investors. The consortium includes Saudi Arabia's Public Investment Fund, Jared Kushner's Affinity Partners, and Silver Lake, with financing orchestrated through $36 billion in cash and $20 billion in debt from JPMorgan.

This monstrous acquisition is a bet on the longevity and value of blockbuster game titles, signifying a potential turning point in the market for leveraged buyouts. However, past deals such as the $45 billion takeover of TXU Energy, Toys 'R' Us, and Hertz caution that not all LBOs result in success.

Under this agreement, EA shareholders will receive $210 per share, a 25% premium over its pre-announcement share price. Analysts caution that while this offer is attractive, it might undervalue EA's future earnings potential, especially with the imminent launch of 'Battlefield 6.' The deal is expected to conclude by the fiscal year 2027, pending regulatory approvals.