Goldman Sachs earns record $110mn fee in Electronic Arts deal

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Goldman Sachs is set to receive a $110 million fee for advising Electronic Arts on its record $55 billion private acquisition deal, making it the most profitable M&A deal in the history of the Wall Street investment bank.

A consortium including the Saudi Public Investment Fund, private equity group Silver Lake, and Jared Kushner’s investment firm Affinity Partners agreed to acquire the video game maker in September.

Goldman served as sole financial advisor to EA in what ranks as the largest leveraged acquisition ever.

The charges come amid a flood of big deals across corporate America — fueled by firm debt markets, loosening oversight on competition, and CEOs’ confidence in the strength of the U.S. economy — that have led to huge payouts to advisers.

Bank of America is poised to earn a $130 million fee from its role advising railroad giant Union Pacific’s $85 billion takeover of rival Norfolk Southern earlier this year, surpassing the $123 million fee JPMorgan Chase earned from advising on drugmaker AbbVie’s $63 billion takeover of Allergan in 2020.

According to a securities filing on Monday, Goldman Sachs received $10 million when the EA deal was announced, with the remaining $100 million due when the deal closes, which requires shareholder and regulatory approval.

The filing revealed that EA has not paid Goldman any advisory or underwriting fees in the past two years. However, Goldman has earned $24 million and $154 million working with PIF and Silver Lake, respectively, in the past 24 months.

Goldman separately had a $1.3 million stake in PIF vehicles and a $200 million stake in Silver Lake funds as of September.

The filing shows that Silver Lake first reached out to EA’s CEO in early March about a potential deal. The Saudi sovereign wealth fund, which already owns a tenth of EA, and Affinity joined the bidding group shortly afterwards.

The group made its initial offer for EA in early September for $200 per share, eventually reaching a deal at $210 per share at the end of the month — a 25 percent premium to its stock price at the time.

The Financial Times previously reported that Kushner’s investment firm will eventually own about 5 percent of EA, while PIF will become a majority owner and Silver Lake a significant minority owner after the deal. The deal is scheduled to close in the first half of next year.

Goldman’s largest publicly disclosed charge to date came from the sale of Pop-Tarts maker Kelanova to Mars Inc. for $36 billion in 2024, with the investment bank pocketing $93 million.

JPMorgan is leading $20 billion in financing for the EA deal, which is expected to generate hundreds of millions of dollars in separate fees for a large group of banks.

Goldman Sachs declined to comment.

This material has been modified to reflect that Goldman Sachs’s stake in PIF instruments is $1.3 million, not $1.3 billion.