A consortium of investors that includes Saudi Arabia’s Public Investment Fund appears on track to receive European Union approval for its $55 billion purchase of video game developer Electronic Arts, according to sources with knowledge of the situation.
Saudi Arabia’s $1 trillion sovereign wealth fund, along with Jared Kushner’s Affinity Partners and private equity firm Silver Lake, announced the deal back in September of last year. The transaction stands as the largest leveraged buyout ever recorded.
For the Public Investment Fund, the acquisition represents a significant step in its broader strategy to position Saudi Arabia as a worldwide center for gaming and sports, while also banking on the lasting commercial value of major game franchises as the industry works its way out of an extended slump.
The move also reflects Saudi Arabia’s ongoing effort to reduce its economic dependence on oil by expanding into sectors such as infrastructure, tourism, sports, and entertainment.
The European Commission, which serves as the EU’s competition watchdog, is expected to give the deal a green light following the conclusion of its preliminary review under the Foreign Subsidies Regulation on July 30, the sources indicated. A separate review under standard merger rules is also expected to result in unconditional approval when it wraps up on July 22.
The Foreign Subsidies Regulation was created to guard against situations where companies receiving government subsidies from outside the EU gain an unfair advantage when acquiring businesses within the 27-nation bloc.
The European Commission declined to offer any comment on the matter. Neither the Public Investment Fund nor Electronic Arts responded to requests for comment.
The anticipated smooth approval stands in contrast to two earlier deals involving Middle Eastern companies. Abu Dhabi state oil firm ADNOC’s acquisition of German chemicals company Covestro and UAE telecoms group e&’s bid for portions of Czech telecoms company PPF both required extensive investigations and concessions before receiving clearance.
