EA Stock Price: Electronic Arts climbs 5% on being acquired for $52.5 billion by private equity firms

Shares in Electronic Arts (EA), the publisher of video game franchises like Madden NFL, Battlefield, and The Sims, climbed 5% on Monday following the announcement that it is to be acquired for $52.5 billion by a consortium of private equity firms.

The deal, which will take the gaming giant private, involves Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners, and values the company at $55 billion (if debt is included).

Affinity Partners is run by US President Donald Trump’s son-in-law, Jared Kushner.

At 12:58 PM EDT, Electronic Arts Inc. stock was at $202.35, up 4.66%, or $9.01.

Terms of the Deal

Under the terms of the transaction, EA’s shareholders will receive $210 per share in cash. This $55 billion enterprise valuation establishes the acquisition as the largest leveraged buyout in history, considerably eclipsing the previous record set by the $45 billion privatisation of the Texas utility TXU in 2007.

Significantly, PIF, which was already the largest insider shareholder in Electronic Arts, will roll over its existing 9.9% investment into the newly private entity.

The video gamer has announced an agreement to be taken private, a transaction that, if closed as anticipated, will end the company's 36-year history as a publicly traded entity, which began with its shares trading at a split-adjusted 52 cents after its IPO.

The IPO occurred seven years after EA was founded in 1982 by William "Trip" Hawkins, a former Apple employee who was inspired by analog sports games like those made by Strat-O-Matic as a teenager.

The move will see the company remain headquartered in Redwood City, California, with current CEO Andrew Wilson, who has led EA since 2013, continuing in his role.

The acquisition consortium firm Saudi Public Investment Fund (PIF) is also a minority investor in Nintendo.

“Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future," said Kushner, CEO of Affinity Partners. “I’ve admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids - I couldn’t be more excited about what’s ahead.”

By going private, EA will be able to retool operations without worrying about market reactions.

Activision Blizzard, one of EA’s biggest rivals was snapped up by technology powerhouse Microsoft for nearly $69 billion in 2023, while the competition from mobile video game makers such as Epic Games has intensified.