A group of investors led by Saudi Arabia's Public Investment Fund (PIF) expects to receive official approval from the European Union to acquire gaming giant Electronic Arts (EA). The deal is valued at $55 billion. According to Reuters, citing informed sources, EU regulators plan to approve the transaction under foreign subsidy control regulations.
Saudi Arabia's Diversification Strategy and Ambitions
The key players behind this historic leveraged buyout are three major entities: Saudi Arabia's Public Investment Fund (PIF), investment firm Silver Lake, and Affinity Partners, linked to Jared Kushner. The intent to proceed with the deal was announced back in September of last year.
For Saudi Arabia, which boasts a fund with $1 trillion in assets, acquiring EA is a strategic move within its broader economic diversification program. The Kingdom aims to reduce its reliance on the oil sector by redirecting capital into tourism, sports, infrastructure, and digital entertainment. Specifically, the focus is on establishing a global hub for video games, leveraging the long-term value of popular franchises like FIFA (now FC), which are expected to remain relevant even after the industry emerges from a prolonged downturn.
Regulatory Process in the European Union
A critical step in finalizing the deal is the decision by the European Commission, acting as the antitrust regulator. It is expected that on July 30, the regulator will approve the acquisition in accordance with the Foreign Subsidies Regulation. This regulation was designed to prevent companies from outside the EU from using state subsidies to gain unfair advantages when acquiring competitors in the European market.
The preliminary review of the deal is scheduled to conclude on July 22, followed by unconditional approval. This decision is expected to be reached faster than in previous cases involving Middle Eastern investors. For instance, acquisitions such as Abu Dhabi's ADNOC taking over German chemical company Covestro or UAE's e& group acquiring a stake in Czech telecom firm PPF were only approved after lengthy investigations and the resolution of identified violations.
