The largest leveraged buyout (LBO) agreement ever signed for a video game company.
The largest corporate acquisition ever made with debt is now history: Electronic Arts announced at the end of September 2025 (the announcement was made on Monday 29 September) that it had just signed an agreement with private equity firm Silver Lake, the Saudi sovereign wealth fund Public Investment Fund, and Donald Trump’s son in law Jared Kushner’s investment company Affinity Partners. The Californian video game developer and publisher, known for games like Battlefield and Madden NFL, is changing hands for £40 billion. Investors have put £27 billion in cash on the table, with investment bank J.P. Morgan adding another £14 billion in financing.
Under the agreement, EA shareholders will receive $210 per share in cash, a 25% premium over $168.32 (the closing price on 25 September 2025, just before rumours of the deal leaked). The shares then rose by 5% by mid-session on Monday 29 September, settling at around $202.54. The company, however, is set to be delisted: the transaction is expected to close in the first quarter of fiscal year 2027, with $18 billion in debt financed at closing. The company’s headquarters will remain in Redwood City, California. Andrew Wilson will continue to serve as chief executive officer.
The LBO comes at a crucial time for the video game company.
Electronic Arts is almost ready to launch the highly anticipated Battlefield 6. Analysts note that the substantial influx of capital from the LBO should allow it to focus on its medium- to long-term growth prospects in the ultra-competitive sports video game sector. For more than a decade, EA’s sports portfolio has stood out for its ability to gain global popularity, as well as recurring revenue with robust in-game spending, which is a key factor in the franchise’s longevity. According to some observers (Benchmark), with Battlefield 6 coming out and potential bookings of £2 billion by fiscal year 2028, EA’s true earning potential is only just beginning to emerge.
A hefty penalty, if necessary
The penalty for failing to complete the LBO agreement on time would amount to £1 billion, both for the video game company and the consortium of investors.
Will large debt-financed acquisitions come back into fashion?
The deal could also mark the return of large leveraged buyouts, which fell out of favour following the failure of several seemingly promising transactions. We just have to think back to the last record-breaking deal: the $45 billion takeover of Texas utility TXU Energy in 2007 by giants such as KKR & Co., TPG and Goldman Sachs, which ended in bankruptcy after only seven years. The LBO deals involving Toys “R” Us and Hertz did not fare much better.
Toys ‘R’ Us, for example, filed for bankruptcy in 2017, some twelve years after its $6.6 billion purchase by Bain Capital and KKR. The car rental company Hertz went bankrupt in 2020; its private acquisition for $14.8 billion dated back to 2005.
For Saudi Arabia, a new step in its development
Finally, a note on the economic policies of the Kingdom of Saudi Arabia. For its Public Investment Fund (PIF) with $1 trillion in assets, the investment in Electronic Arts represents one of the many opportunities that the country is seizing to diversify its economy away from oil, investing billions of dollars in alternative sectors such as infrastructure, tourism, sports and gaming, changing its image forever (and for the better).
