In September, Electronic Arts revealed that there’s a $55 billion deal in place to bring the company private under Jared Kushner’s Affinity Partners, the private equity firm Silver Lake, and Saudi Arabia’s Public Investment Fund. Now, a new report indicates that the PIF may be given near complete control of the company, because Saudi Arabia is putting up most of the money to complete the deal.
According to The Wall Street Journal, EA’s potential buyers have disclosed that PIF would be given 93.4% of EA in a document filed with Brazil’s antitrust regulator. Silver Lake would only own 5.5% of the company, while Affinity would have a much smaller share: 1.1%. PIF is also a major investor in both Silver Lake and Affinity, which would leave it with more power over EA.
WSJ notes that sovereign-wealth funds like the PIF normally make much smaller investments in buyouts like this one, while private-equity firms would take the lead as the primary owners and investors. Saudi Arabia has already invested in several video game companies, including Nintendo and Take-Two Interactive. In this year alone, Saudi Arabian-owned mobile developer Scopely purchased Niantic’s video game division, the company behind Pokemon Go and other mobile titles.
Senators Richard Blumenthal and Elizabeth Warren have raised their concerns about “foreign influence” on EA if the deal goes through. In a regulatory filing made in November, EA claimed it would retain creative control of the company following the conclusion of the sale.
A subsequent report noted that PIF may be overextended and bleeding money from a number of questionable and pricey investments. Although that’s not expected to scuttle the EA deal, the report indicated that even oil-rich Saudi Arabia may not be able to replenish the fund as fast as PIF is spending money. The PIF denied that report and stated that it still has $60 billion in cash and “similar financial instruments.”
