RESOLVING THE LEDGER
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A consortium led by the Public Investment Fund of Saudi Arabia has announced the completion of the $55 billion acquisition of video games maker Electronic Arts .
The deal was also financed by private equity firm Silver Lake and Affinity Partners, which is led by President Donald Trump's son-in-law Jared Kushner.
EA, which confirmed the deal late on Tuesday, said its stock has ceased trading and will be delisted from the Nasdaq. Its shareholders will receive $210 in cash per share.
The deal represents further Saudi expansion into the world of sports and gaming. PIF's head of international investments Turqi Alnowaiser said in a statement that "entertainment and sports are key areas of strategic focus" for the fund.
Analysts have previously highlighted the high level of debt EA is taking on as part of the deal, while questioning the future of its intellectual property.
PIF is reportedly borrowing $20 billion from the deal's advisor JPMorgan to finalize proceedings, which is thought to be the largest leveraged buyout in history.
Analysts told CNBC last year that the debt burden will see EA consolidate around its safest franchises, such as The Sims, Battlefield, and sports titles, rather than experiment with new IPs.
"The debt hanging over their head isn't likely to create a shift in strategy," Michael Futter, F-Squared founder, told CNBC.
"Instead, it will likely see leadership entrench themselves in the titles they think have the largest revenue potential, even if those also carry the largest risk."
"I don't know how EA is going to service this debt without significant layoffs, studio closures, and possibly IP sell-off," he added.
— CNBC's Lim Hui Jie also contributed to this report.
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