Saudi Plans for Video-Game Hub Grow With $55 Billion EA Deal

Core Insights - Saudi Arabia is advancing its strategy to become a gaming hub through a significant deal to take Electronic Arts Inc. private, with the Public Investment Fund being the largest contributor to the $36 billion equity financing for the transaction [1][2]. Group 1: Investment and Financial Details - The Public Investment Fund is rolling over a $5 billion equity stake into the new entity and is providing more fresh capital than partners Silver Lake Management and Jared Kushner's Affinity Partners [1]. - The deal is set to be the largest leveraged buyout in history, with JPMorgan Chase & Co. providing $20 billion in debt financing [6]. - Electronic Arts reported earnings of $1.12 billion on sales of $7.46 billion in its latest fiscal year, with a new game release anticipated on October 10 [5]. Group 2: Strategic Goals and Background - Crown Prince Mohammed bin Salman, a gaming enthusiast, is focusing on the gaming sector as part of a national strategy to create tens of thousands of jobs and diversify the economy away from oil [2][4]. - The kingdom has invested approximately $30 billion in the gaming industry, including stakes in Nintendo and the acquisition of a game publisher [3]. - Saudi Arabia's overarching strategy aims to generate jobs over the next 20 years, with Electronic Arts fitting well into this vision [4]. Group 3: Historical Context - Saudi Arabia initially invested in Electronic Arts in 2021, acquiring a $1.1 billion stake, which has since increased to a holding valued at $4.8 billion as of September 26 [7]. - The Public Investment Fund's portfolio also includes investments in other gaming companies such as Embracer Group AB, Take-Two Interactive Software Inc., and Nexon Ltd. [7].