While EA’s board has already approved the company’s planned acquisition by Saudi Arabia’s Public Investment Fund (PIF), Affinity Partners and Silver Lake, lawmakers from the US have requested the Federal Trade Commission to take a closer look at this buyout before it goes through. The lawmakers include over 40 House Democrats in the US Congress who have written and signed a letter to the chairman of the FTC, Andrew Fergusson, to review the deal.
“We are writing to express serious concerns regarding the proposed acquisition of Electronic Arts (EA) by the Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, and private equity firms Silver Lake and Affinity Partners,” wrote the lawmakers in the letter. “We are committed to preserving fair, competitive labor markets and safeguarding American jobs, and given the impact of this acquisition on workers, labor market concentration, and the long-term competitiveness of the U.S. video game industry, we urge you to thoroughly review this transaction.”
They state that the video game industry has already been marked by instability, with opportunities for workers shrinking regularly thanks to lay-offs. Along with this, they have also noted that EA itself has “eliminated more than 1,700 US jobs since 2023,” which contributed to over 35,000 industry-wide lay-offs since 2022. This, combined with the fact that the acquisition is a leveraged buyout that will result in EA taking on at least $20 billion in debt will also give the company strong incentives for further cost-cutting.
“Additionally, we are concerned that the proposed buyout is expected to be financed with at least $20 billion in debt, which creates strong incentives for the acquiring firms to pursue further cost-cutting measures, including lay-offs, offshoring, restructuring, or studio closures,” continued the lawmakers. “These actions would not only jeopardize thousands of high-skilled American jobs, but also further concentrate already fragile labor markets for software engineers, artists, writers, testers, and other professionals whose skills are essential to the industry.”
The letter is capped by the lawmakers noting that “workers deserve a fair, competitive marketplace where their skills are valued,” and that EA will likely end up being dominant in the labor market thanks to “new avenues for vertical integration and cross-industry leverage.”
“We respectfully urge the Commission to conduct a thorough investigation into the labor market consequences of this proposed acquisition, including EA’s existing wage-setting power, the likelihood of post-transaction layoffs, the degree of labor-market concentration in relevant geographic and occupational markets, and the role of cross-ownership in shaping labor outcomes. Workers deserve a fair, competitive marketplace where their skills are valued,” they concluded.
The acquisition deal for EA is valued at about $55 billion, and since the company’s shareholders have already approved it, the company is essentially seeking further approvals from various government regulatory bodies. This letter by the US Congress would encourage the FTC to potentially throw a wrench in the company’s plans.
All in all, the acquisition is expected to be completed by Q1 FY2027, which will see its shares no longer listed on any stock exchange. Current EA CEO Andrew Wilson is also expected to retain his position, and the company will retain its headquarters in Redwood City, California.
