Electronic arts acquisition by private equity sparks more uncertainty for the Canadian gaming industry
Electronic arts can mark $ 55 billion acquisitions the largest leveraged byouts in history and are being bought by private equity in a new phase of public companies – leading to more uncertainty for Canada’s gaming industry.
Below Conditions of a deal declared on MondayA group of three buyers will pay $ 210 per share to the company’s stockholders.
Buyers include private equity firm Silver Lake Partners, Saudi Arabia’s sovereign money fund PIF and efficiency partners. Efficiency Partners is a private equity firm run by Jaared Kushnar, son -in -law of US President Donald Trump.
Electronic arts, video games manufacturer Maden NFL, Battle fieldAnd SimsCanadian roots are, Burnbai-based game developer bought specific software In 1991 And it was renamed Electronic Arts Canada.
Now known as EA Vancouver, that studio went to develop some of the largest franchises of the company, and claims about 2,400 employees in the lower mainland. The Flagship Vancouver team is known for the production of EA Sports FC Soccer Games and NHL Hockey Games.
“We are entering a new era of the occasion,” EA CEO Andrew Wilson wrote to the employees in a memorandum on Monday.
“It is one of the largest and most important investments made so far in the entertainment industry. Our new companions bring deep experiences in sports, gaming and entertainment. They are committed with confidence for EA-they believe in our people, our leadership and long-term vision that we are now building together.”
But the deal is expected to be closed in the first quarter of FY 2027, an industry also raises uncertainty for workers who have already faced several rounds of pruning in one. Recession since epidemic.
Bradley Shankar, a gaming editor of Tech Publication Mobile Rup, said that the gaming industry has seen major acquisitions earlier, but no one compare it.
He said, “We have seen in gaming space, publicly trading companies are buying each other … but it is a private equity investor group taking EA – so it was something that we have not seen earlier on this scale and certainly not).”
“Canada has a lot of big EA titles. So it is one of the big question marks around the deal – how will they be affected?”
After becoming private, in the past public companies often undergo widespread cost-cutting that may include pruning.
There is no indication that this will happen to EA, although the company is taking a loan of about $ 20 billion for the deal.
After cutting five percent of its workforce in 2024, EA finished March with 14,500 employees and then laid several hundred people in May.
The EA did not respond to the CBC news request for comments.
Saudi Arabia’s rising investment
The acquisition of PIF by Saudi Arabia’s sovereign Dhan Kosh under the leadership of Crown Prince Mohammed bin Salman, according to Shankar, expands Saudi investment in the gaming industry.
“Even before that, he had a stake in EA, he has a stake in Nintendo, Capkom, Tech-to Interactive, which is the original company of Rockstar, which makes the Grand Theft Auto, so he clearly already holds his hand in a lot of pies,” he said.
“Because they are private, there are a lot of speculation. When you are a publicly trading company, you have a lot of accountability in the context of the numbers that you’re keeping out and there is at least slightly more transparency.”
According to Human Rights Watch, “PIF has directly convenient and benefited from the violation of serious human rights associated with Crown Prince Mohammed”.
“PIF investment in the United States, United Kingdom, and other places in the world also serves a powerful (as) tool For the soft power and influence of Saudi Arabia, “it is said in one November 2024 Report On the fund.
Although there is still an enthusiasm in the EA video game, its annual revenue has been stable during the last three financial years, which hovers from $ 7.4 billion to $ 7.6 billion.
