Saudi Arabia's sovereign wealth fund PIF, as part of an investor group, is close to securing European Union approval for its acquisition of video game developer Electronic Arts (EA). Reuters reported the development, citing people familiar with the matter. The $55 billion deal is set to become the largest leveraged buyout (LBO) in history.
In addition to PIF, which manages $1 trillion in assets, the investor pool includes Jared Kushner's Affinity Partners and private equity firm Silver Lake. The partners officially announced the transaction in September last year. For Saudi Arabia, this acquisition is part of a major strategy to diversify its economy and pivot away from oil dependence by investing in infrastructure, tourism, sports, and gaming.
The European Commission is reviewing the deal under its Foreign Subsidies Regulation (FSR), which aims to prevent unfair financial interventions from non-EU countries when acquiring assets within the bloc. The preliminary review under FSR rules will end on July 30, and insiders state that the regulator is poised to clear the merger. Official representatives from the European Commission, PIF, and EA have so far declined to comment.
In parallel, the transaction is undergoing a review for compliance with standard EU antitrust merger regulations. Investors are expected to receive unconditional clearance on this front after July 22, when the initial phase of the regulator's review concludes.
The current proceedings contrast with previous precedents involving Middle Eastern capital in the EU. Notably, the acquisition of Germany's Covestro by Abu Dhabi's state oil firm ADNOC and the bid for Czech telecom group PPF's assets by the UAE's e& only received the green light following lengthy investigations and strict regulatory remedies. In contrast, the Electronic Arts buyout stands a strong chance of securing a swift and smooth approval in Brussels.
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