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Electronic Arts is being acquired in a landmark $55 billion leveraged buyout, the largest tech take-private deal ever. The move highlights the gaming industry’s continued appeal and the growing trend of substantial deals in the technology sector.

With the acquisition funded by a consortium including Saudi Arabia’s Public Investment Fund, Silver Lake, and Affinity Partners, what does this mega-deal mean for the future of gaming and private equity’s interest in the tech space?

In today’s financial recap:

Electronic Arts $55B Leveraged Buyout is Largest Tech Take-Private
SWIFT and Global Banks Unite on Blockchain Payments
SEC Greenlights ETF Expansion into Mutual Funds
Revolut Considers Dual London-New York IPO at $75B Valuation

Electronic Arts $55B Leveraged Buyout is Largest Tech Take-Private

The TradeWatch: Electronic Arts is being acquired by a consortium including Saudi Arabia’s Public Investment Fund and Silver Lake in a $55 billion leveraged buyout, marking the largest tech take-private deal ever. This move signals the gaming industry’s enduring value and the increasing trend of mega-deals in technology.

Unpacked:

The deal, valuing Electronic Arts at approximately $55 billion, involves an investor consortium in an all-cash, take-private move, according to Electronic Arts Stock.
EA shareholders will receive $210 per share in cash, representing a 25% premium over the closing price on September 25, prior to deal reports, indicating a significant return for investors.
The acquisition is funded by a $36 billion equity investment and $20 billion in debt financing, highlighting substantial financial backing from PIF, Silver Lake, and Affinity Partners.

Bottom line: This acquisition underscores the gaming industry’s strong potential and attracts significant investment from private equity. This deal may enable EA to restructure operations away from the scrutiny of public markets, potentially allowing for long-term strategic shifts and innovative investments.

SWIFT and Global Banks Unite on Blockchain Payments

The TradeWatch: SWIFT partners with over 30 global banks to create a blockchain-based ledger, enabling 24/7 cross-border payments and supporting tokenized assets and CBDCs, marking a major shift in financial infrastructure.

Unpacked:

SWIFT’s initiative counters the early expectations that blockchain technologies would displace it, with platforms like Ripple and Stellar initially presented as faster alternatives.
The project aims to provide interoperability between traditional banking systems and emerging blockchain platforms, including stablecoins and central bank digital currencies (CBDCs).
This collaboration plans to use a shared digital ledger that will record, sequence, and validate transactions, in addition to enforcing rules via smart contracts.

Bottom line: SWIFT’s move into blockchain technology highlights the need for traditional financial institutions to evolve and integrate with new technologies. This initiative signals a future where SWIFT adapts to the changing landscape of global payments rather than being replaced by it.

SEC Greenlights ETF Expansion into Mutual Funds

The TradeWatch: The SEC is paving the way for asset managers to incorporate exchange-traded fund (ETF) share classes into mutual funds, a move that will likely speed up approvals, boost the number of ETFs, and broaden access for retail investors. This decision follows the expiration of Vanguard’s dual-share class model patent in May 2023.

Unpacked:

The SEC’s planned order is initially specific to Dimensional Fund Advisors (DFA), but is expected to open the door for other firms meeting certain guidelines, which co-CEO at DFA described as a “win for investors.”
Investors will now be able to buy and sell exchange-traded mutual fund shares throughout the day at market price through their brokerage accounts, instead of waiting for a mutual fund order to settle at the day’s closing price, making it more accessible to average retail investors.
Brian Daly, director of the SEC’s Investment Management Division, told Reuters, that this change will increase choice, reduce expenses, increase tax efficiency, and make ETFs more accessible.

Bottom line: This regulatory shift has the potential to transform the fund landscape, making ETFs more accessible with increased potential for retail investors to tap into existing funds through their brokerage accounts. This move not only benefits investors but also injects competition and innovation into the asset management industry.

Revolut Considers Dual London-New York IPO at $75B Valuation

The TradeWatch: Revolut is considering a dual listing on the London Stock Exchange and New York Stock Exchange, potentially valuing the fintech giant at $75 billion and marking a significant milestone for both financial hubs.

Unpacked:

If approved, Revolut would become the first firm to join the FTSE 100 while simultaneously listing in New York.
Recent UK regulatory reforms and political support may be influencing Revolut’s decision to debut in London.
The listing could value the fintech giant at approximately $75 billion, positioning it among the most valuable companies on the London Stock Exchange.

Bottom line: Revolut’s potential dual listing signals the growing maturity of fintech companies and could encourage more firms to explore similar strategies. A successful IPO would boost confidence in both the London and New York markets, potentially attracting further investment and innovation.