👉 Background: Electronic Arts (EA), founded in 1982, is one of the world’s biggest video game publishers. It's best known for EA Sports FC (formerly FIFA) and The Sims. EA has stood out in recent years amid a wave of gaming industry consolidation.

👉 What happened: Now, Saudi Arabia’s Public Investment Fund, along with Silver Lake Management and Affinity Partners, has agreed to acquire EA in a deal worth $55 billion USD. This represents a 25% premium over EA’s share price before news of the talks surfaced last week.

👉 What else: The takeover will be financed with $36 billion USD in cash and $20 billion USD in debt from JPMorgan Chase & Co. This will make it the largest debt commitment ever made for a buyout. For Saudi Arabia’s sovereign wealth fund, the deal marks an even deeper move into gaming, its latest preferred asset class.

What's the key learning?

💡As Saudi Arabia’s sovereign wealth fund continues to go further into private equity, it continues to go further into gaming investments.

💡EA’s strength in sports titles provides the kind of stable, predictable revenue private equity firms value. Games like EA Sports FC and Madden NFL consistently rank among top sellers. In fact, EA had  four of last year’s top 10 gaming bestsellers.

💡Middle Eastern sovereign wealth funds are playing a larger role in the world’s biggest private equity deals. Beyond EA, the Saudi sovereign wealth fund, through its subsidiary Savvy Games Group, acquired both Pokémon Go and Monopoly Go!.