Saudi Arabia's proposed $55 billion acquisition of Electronic Arts has cleared a significant hurdle after the European Commission announced it will not oppose the buyout. The European Commission approved the acquisition of sole control of Electronic Arts Inc. by the Public Investment Fund (PIF) of Saudi Arabia under the EU Merger Regulation.
According to the ruling, the Commission concluded that the notified transaction would not raise competition concerns because of its limited impact on competition in the markets where the companies are active. The review was examined under the normal merger review procedure.
Approval Differs From Past Tech Mergers
The European Commission's approval of this deal proceeded much more easily than its review of Microsoft's acquisition of Activision Blizzard, which triggered an in-depth investigation and specific commitments before receiving a green light.
The EA transaction functions differently than a standard corporate merger. It involves a transfer of ownership that will take the company private. This shift carries distinct financial risks, including the $20 billion in debt EA will take on to finance the deal, though those factors were excluded from the European Commission's competition-focused ruling.
Pending Scrutiny and Future Obstacles
While the European regulatory hurdle is cleared, the acquisition still faces nominal opposition. Game developers and US lawmakers have voiced profound concern regarding the takeover and have called on the US Federal Trade Commission to carefully scrutinize the transaction.
However, further regulatory blocks in the US face political headwinds. FTC chair Andrew Ferguson supports US president Donald Trump, who maintains close ties with Saudi Arabia's de facto ruler Mohammed bin Salman. Bin Salman chairs the Public Investment Fund, which is slated to own more than 93% of EA if the acquisition is finalized. The entire agreement is also backed by an investment firm founded by Trump's son-in-law, Jared Kushner.