One of the important stages of the sale of Electronic Arts (EA) nearly fell through recently, Bloomberg claims.
Battlefield 6
As Bloomberg reports, JPMorgan Chase faced risks as it had previously agreed, along with a number of creditors, to provide EA with debt financing for the transaction amounting to $20 billion. In March, JPMorgan decided to sell part of the debt ($14.5 billion) to other investors. However, the timing was far from ideal as it coincided with the height of the war in Iran.
It's reported that realizing the complexity of the situation, the bank hesitated. The worsening situation in the Middle East could have led to a further increase in oil prices and market crashes, making investors less interested in purchasing EA's debt. Therefore, JPMorgan Chase assigned a code name, Project Eagle, to its deal and closely monitored the social media of U.S. President Donald Trump. Luckily, on March 23, Trump announced a five-day ceasefire with Iran.
Over the next three days, JPMorgan Chase actively negotiated with investors, ultimately successfully completing the sale of part of EA's debt. Although the structure of the deal was altered a couple of times, interest in it far exceeded expectations: more than 500 firms expressed their willingness to purchase the debt securities of EA, collectively offering about $50 billion—3.4 times more than what JPMorgan Chase had asked for.
An interesting point: according to Bloomberg, the sale of EA's debt could also have been hindered by a decline in investor enthusiasm regarding artificial intelligence. However, in early March, EA's top management held a meeting reassuring that with the help of AI, the company could develop games more quickly and increase earnings.
The complete sale of EA is expected to conclude in the coming months. The new owners of the company will include the Saudi Arabian Sovereign Wealth Fund, Silver Lake, and Affinity Partners.