Unlock the Editor’s Digest for free

Video games maker Electronic Arts is nearing a $50bn deal to go private with a consortium including Silver Lake and Jared Kushner’s Affinity Partners, in one of the largest leveraged buyouts of all time.

A deal could be announced as early as Monday, provided it does not face any last-minute hurdles, said three people familiar with the matter. EA is likely to be valued at as much as $50bn, they added.

The consortium behind the take-private deal includes Saudi Arabia’s Public Investment Fund, the technology-focused private equity group Silver Lake and Affinity Partners, the investment firm run by President Donald Trump’s son-in-law Jared Kushner, the people said.

EA, which has about 700mn user accounts, has one of the richest content libraries among its competitors, including the titles EA Sports FC, Madden NFL, and Battlefield. JPMorgan is arranging a debt financing package worth in excess of $20bn for the deal, the people added.

The deal marks one of the largest take-private transactions in history, topping in dollar value the $45bn buyout of Texas utility group TXU in 2007. However, including debt, that deal totalled nearly $70bn in enterprise value.

Silver Lake is one of the most prolific private equity firms, having recently taken private Endeavor, the talent and sports group that owns Ultimate Fighting Championship. It is also participating in the group of investors splitting TikTok’s US operations from ByteDance in a deal brokered by the Trump administration.

Kushner’s Affinity Partners was created in 2021, shortly after he left Washington at the end of Trump’s first administration. The firm is backed by PIF and other large Middle Eastern investors, which comprise the bulk of its more than $4bn in capital.

Kushner acted as one of Trump’s top advisers in his first term and helped broker the Abraham Accords, a normalisation of economic relations between many Arab countries and Israel, building deep ties in the region.

PIF already ranks among one of EA’s largest shareholders. The sovereign wealth fund, with more than $925bn of assets, has been a significant investor in the gaming sector. Its Savvy Games unit acquired Pokémon Go, the hit mobile app, as part of a $3.5bn deal earlier this year.

The Wall Street Journal first reported the deal. Shares in EA jumped about 15 per cent to $192.83 on the news, giving the California-based group a market value of roughly $48bn. The stock had been up about 17 per cent over the year to date before the news.

Silver Lake, Affinity Partners, PIF and EA did not immediately respond to requests for comment. JPMorgan declined to comment.

Investors have already begun signalling to JPMorgan their interest in providing the debt needed to take EA private, which would allow the largest US bank to start building an order book.

“It’s the perfect time to do this deal,” one interested lender said of Silver Lake’s pursuit of EA. “Markets are at all-time highs . . . There’s so much demand for paper. This is it.”

The deal would come as the games industry has been struggling to find new sources of growth, following a boom during the Covid-19 pandemic. EA’s total net revenue in its most recent quarterly results showed almost no year-on-year growth.

Some industry executives say generative artificial intelligence tools will be able to automate many aspects of the game development process, bringing down costs that can run into hundreds of millions of dollars for some blockbuster titles.

Though AI deployment remains at an early stage in the industry, the technology could allow EA’s new private equity owners to slash costs.

Two years after Activision Blizzard’s $75bn sale to Microsoft in one of the tech industry’s biggest-ever deals, EA is one of the world’s largest independent games publishers outside China, alongside Grand Theft Auto maker Take Two Interactive.

EA’s stable of annual franchises includes some of the console industry’s most bankable games, including its hit football title EA Sports FC, formerly known as Fifa.

However, its traditional business model of charging upwards of $70 for a packaged game has been challenged by free-to-play multiplayer titles such as Roblox and Fortnite. EA has been working to expand into these so-called “live services” games, which now account for almost three-quarters of its net bookings, a measure of players’ total spending on its games before deducting fees to retailers and digital platforms.

Additional reporting by Eric Platt