Saudi Takeover of EA in $55 Billion Deal Raises Serious Concerns (nerds.xyz) 67
BrianFagioli writes: Electronic Arts has agreed to a $55 billion buyout by Saudi Arabia's Public Investment Fund (PIF), private equity firm Silver Lake, and Jared Kushner's Affinity Partners, marking the largest all-cash sponsor take-private deal ever. Shareholders will receive $210 per share, a 25 percent premium over EA's unaffected price, and once the transaction closes the company will be delisted from public markets. EA CEO Andrew Wilson will remain in charge, with the group arguing that private ownership will allow the publisher to innovate faster and expand its global footprint.
The deal, however, is already sparking controversy. PIF, a sovereign wealth fund controlled by the Saudi government, will effectively gain control of one of the most influential names in gaming. While investors stand to profit, many gamers and industry watchers are concerned about how Saudi ownership could shape EA's creative direction, monetization strategies, and role in esports. With regulatory approvals still pending, the takeover raises difficult questions about the intersection of gaming, politics, and global soft power.
The deal, however, is already sparking controversy. PIF, a sovereign wealth fund controlled by the Saudi government, will effectively gain control of one of the most influential names in gaming. While investors stand to profit, many gamers and industry watchers are concerned about how Saudi ownership could shape EA's creative direction, monetization strategies, and role in esports. With regulatory approvals still pending, the takeover raises difficult questions about the intersection of gaming, politics, and global soft power.
I agree (Score:3)
EA CEO Andrew Wilson will remain in charge
This is very concerning
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This is very concerning
It's not. Concerning would be putting someone competent in charge who is then builds up EA into a proper functioning company rather than the dying shell it currently is, and then having that company controlled by the Saudis. The sooner this moron can kill EA the better.
Let the Saudi's buy it (Score:2)
I'm no fan of the Saudi's which is precisely why I say let them buy the company. EA hasn't been relevant to any gaming I've been doing for over a decade now and I'm not overly concerned with what "creative direction" they take with their sports games, the only thing that has kept EA afloat.
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Your overuse of apostrophes is not how I wanted to start my Monday.
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Your overuse of apostrophes is not how I wanted to start my Monday.
Overuse? Do you mean the one case of improper usage that should have read "Saudis" or do you have some sort of disability that prevents you from reading grammatically proper text with apostrophes?
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The fuck your feelings crowd seems to have the most fragile feelings of all.
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Why, because I don't care that the Saudis buy EA because EA makes shitty games anyway?
Funny take from what I wrote. Almost like you're listening to the voices in your head again.
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The concern here is that the conservative politics of the Saudis
It's nice that we can agree that "conservative" means a tyrannical monarchy with massive wealth disparity and no human rights.
Soverign Wealth Fund (Score:5, Informative)
Elon Musk is often cited as the wealthiest man in the world. Most of his capital, however, is tied up in stocks and investments. On paper, it's worth a lot of money, but it's not liquid.
Mohammed bin Salman controls the Saudi Public Investment Fund entirely, and is now also the de-facto ruler of the country itself. He has access to his family's wealth, which is tens of billions of dollars in liquid capital, but also controls the PIF, which has access to trillions.
What this means, is that if a royal family member wants an apartment in NYC, they don't buy an apartment, the PIF buys an entire apartment building and they take over four or five floors. If they want a plane, the PIF buys Saudia an Airbus 380-800 and builds them a private gate. Jealous that Emirates has more cachet than Saudia? They start up a new ultra-luxury airline, with customized planes and all new gates in a dozen airports. If a royal family member likes golf, they start their own league. A family member likes soccer, they buy a chunk of the Premier League.
Elon Musk, by any metric, has a lot of money. Sovereign wealth is in another category altogether.
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Nation (Score:5, Informative)
Saudi Arabia is an absolute monarchy. The royal family are the nation. We only vaguely know how much money they have because they don't need to report it, as they are not taxed. They get *all* revenue from state-owned enterprises then distribute money to the government as they see fit. They keep their money in banks that they own governed by laws that they make.
Brunei has the same situation. The sultan was traditionally the richest man in the world.
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Saudia doesn't have any A380. The only airline that can make them work is Emirates anyway.
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Both people are also good examples why you can be an utterly crappy person, despite/because having tons of money.
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If they want a plane, the PIF buys Saudia an Airbus 380-800 and builds them a private gate.
Citation needed. Zero A380s are owned by anything Saudi. The middle eastern companies that own A380s are Air Emirates, Etihad Airways, and Qatar Airways. These are not Saudi.
At this point, buying an A380 would be stupid. Buying other planes would make more sense.
Point (Score:2)
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The point is the royal family has the money to buy anything they want. Planes, apartment buildings, yachts, skyscrapers, cities, airlines, football clubs, hotels, restaurants, software companies, etc...
And you missed the point that money is not the only factor when buying something. Practicality of purchasing the object does not seem to be a factor in your world.
If they wanted an Airbus 380-800, they'd buy it.
And how would they buy an A380 again? Airbus is no longer taking orders for them, and all planes have been delivered since 2021. The A380 manufacturing facilities have long been repurposed. The Saudis can only buy existing, used A380s. Maintaining a single plane that is discontinued and where only 251 were made is not the brightest idea.
To that point Riyadh air, also owned by PIF, is planning on buying a few dozen Boeing Dreamliners.
And that i
It's a leveraged buyout (Score:4, Interesting)
I don't have a huge amount of love for electronic arts but they do occasionally put out an actual game instead of a Skinner box. This is basically going to destroy them.
It's possible Saudi Arabia actually wants to own and run the company. They know that one way or another oil sales are going to go down. And I need those sales to buy weapons to defend themselves against their neighbors that they're always pissing off.
On the other hand when EA very likely collapses maybe somebody else will finally get a shot at making a football game. I mean it's been what something like 20 years since we've had anyone else thanks to the exclusivity deal.
Still it absolutely boggles my mind that leveraged buyouts are legal. We have lost tons of companies and hundreds of thousands of jobs to them. But heaven forend we do anything against capitalism.
All-Cash (Score:1)
Re:All-Cash (Score:4, Interesting)
If you read the article, "The deal is expected to close in the first quarter of fiscal 2027, pending regulatory and shareholder approval. Financing will come from $36 billion in equity and $20 billion in debt arranged by JPMorgan, with $18 billion funded at closing.
I'm not a finance person, so I don't know in what context the "all-cash" wording in the summary might make sense, but the article is pretty clear on that.
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Ah, I guess it's "all-cash" as in existing shareholders will receive all-cash for their shares.
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Yes, "all cash" just means that current shareholders will receive a single cash payment, and no shares in the new entity (as opposed to a "cash and stock" takeover, where current shareholders receive a cash payment in addition to shares of the company performing the takeover).
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Yeah I think I see the confusion (Score:2)
That said when companies do that they almost always shuffle the debt off of their books and onto the books of the target company.
Meaning electronic arts is eventually going to get settled with 20 billion in debt.
It's possible the Saudis will eat that because they want to have diverse investments. But I mean it's still 20 billion dollars that's a h
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I just don't see the problem. Sometimes you have to take out a loan to buy something. Where are you seeing a problem?
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You are buying the house to live in it (Score:2)
In an leveraged buyout a company isn't buying something to use they are buying it to loot. The understanding is the people buying the asset are going to devalue the asset by taking all the value out of it leaving no collateral to speak of.
Banks allow this because they get huge kickbacks and fees from these deals and the people involved don't care if everythin
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"In an leveraged buyout a company isn't buying something to use they are buying it to loot."
Sometimes, yes, but that is not the only way such purchases happen and not the only time leveraged buyouts are used. They can be used to buy any company. They are often used in the hostile/predatory manner you describe, and became notorious because of that association, but that's not their reason for being. They are often used for other purposes, like taking a company private, spinning off a division, or
New franchise (Score:1)
Can't wait for Journalist Butchering Simulator 2027!
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Can't wait for Journalist Butchering Simulator 2027!
Simulator? Hell, why not extend the gaming into the real world via robotics and AI? We're already living in a world seemingly inspired by dystopian Science Fiction. We might as well go whole hog and create the equivalents of movies like Death Race and of historical "games" such as Gladiators vs Lions. Kill your (least) favourite journalist by remote control, and win cash prizes!
Re:New franchise (Score:5, Funny)
I'm expecting a new Sim City installment where you build a futuristic city in the desert with lots of cheap foreign labour whom you work to death
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Finally we'll also have a play area bigger than the tiny box the previous Sim City game provided. Unfortunately it can only be expanded in one linear direction.
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I'm expecting a new Sim City installment where you build a futuristic city in the desert with lots of cheap foreign labour whom you work to death
So the same as before where you build cities without worrying about the pay or cost of the workers who actually build it. The city just magically appears when you click on stuff.
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Speak for yourself, I'm looking forward to Covert Terrorism Funding Simulator 2028!
Re: New franchise (Score:2)
Buying soft power (Score:5, Insightful)
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They don't care one bit about their image. They know the oil money won't last forever so they better diversify now.
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I guess the current owners of EA don't give a fuck about any of that.
The current owners of EA are simply wondering how they can start doing that themselves. I mean we're talking about a company that literally is selling you the same game every year for an ever inflated price while providing nothing in return.
But but but.. (Score:2)
But I thought free-market capitalism was good?!
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Jared Kushner (Score:2)
Oh man Hunter Biden is going to catch so much shit for this. Wait, nobody is calling out how the presidents son in law got this sweet deal? Maybe Kushner will leave a laptop at repair shop with a blind owner. Will MTG show pictures of his dick to congress like she did with Hunter?
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Kushner has been doing this kind of work in the Middle East since before Trump became President. Hell, before he even married into the family.
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Kushner has been doing this kind of work in the Middle East since before Trump became President. Hell, before he even married into the family.
Bullshit. Citation needed. He dealt (poorly) in NYC real estate, just like his future father-in-law. From [wikipedia.org]:
His "investment firm" was just a bribe for pulling the rug over Saudi Arabia's crown prince kidnapping, killing, and dismembering a journalist that was critical of
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Damn, munged the link: https://en.wikipedia.org/wiki/... [wikipedia.org]
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I don't care to argue with you. Enjoy your time in the wilderness, it'll be a generation or more before anyone takes you guys seriously again..
Interesting (Score:2)
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Coming soon to EA! (Score:1)
Reviewers Beware! (Score:3)
The Saudi regime has been known to dismember journalists, so game reviewers should think twice before awarding low marks for future EA products.
And nothing of value was lost (Score:1)
will effectively gain control of one of the most influential names in gaming
No. EA is not one of the most influential names in gaming. They aren't even top 10. Everything in EA's portfolio is garbage. They have ruined every studio they have bought. EA Sports has nothing of value (don't say Madden because Madden hasn't been relevant for two decades now).
Recent releases from EA:
-Skate (trash)
-Battlefield 6 (awful)
-F1 25 (worthless)
-FC 26 (nothing new or different essentially the exact same as all previous FC/FIFA games)
-College Football (same as above)
-Dragon Age: The Veilguard (wors
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The only concern it raises... (Score:2)
... is whether we'll finally stop seeing activist slop like Push-up scenes in Veilguard and if we'll get back to having cool Dark Fantasy epics.
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Like EA matters lately (Score:2)
can we still blame violent video games (Score:3)
"Yo highness, can we *finally* get that Need for Speed: Dubai upgrade?"
Telemetry (Score:1)
"When you launch an online-capable game, these technologies may activate using kernel, admin or user privileges, and monitor and collect from your gameplay and device’s RAM or other memory, processes, visuals, communications, and file storage for the purposes of detecting violations of, and enforcing, the Rules of Conduct."
EA may collect relevant information needed for our investigation and enforcement purposes such as your account information, details related to an Unauthorized Third-Party Program, any EA PC Game files that were modified, and times cheating was detected.
So essentially Saudi Arabia is getting massive, global spyware capabilities.