FTC OKs BioWare/Pandemic buyout
US government sees nothing amiss with Electronic Arts' $860 million purchase of Canadian/Californian megadeveloper.
Last month, Electronic Arts stunned the game industry by announcing it was purchasing BioWare/Pandemic. When it was created in November 2005 by the union of Canadian role-playing developer BioWare and Californian action-game studio Pandemic, the so-called superdeveloper looked set to buck the traditional developer-publisher relationship by tapping into $300 million from venture capital firm Elevation Partners.
However, when Elevation board member John Riccitiello became EA's CEO, he upped the ante by offering $860 million to buy BioWare/Pandemic outright. The deal would see the Redwood City, California-based publisher pay $620 million in cash to the stockholders of VG Holding Corp., the Elevation-backed holding company that owns BioWare/Pandemic.
In addition, the publisher plans to issue an additional $155 million in equity to unidentified VG Holding employees, as well as assume $50 million in outstanding VG stock options. It also will lend VG $35 million to fund BioWare/Pandemic's transition to becoming wholly owned subsidiaries of EA--though the studios will retain their names and current locations.
Though many EA detractors decried the deal, the only official hoop it had to jump through was landing approval from the Federal Trade Commission. Today, the Thomson Financial news service reported that the US government body has given its blessing to the BioWare/Pandemic even before the 30-day period required by federal law expired. Now, barring a stockholder revolt, nothing stands in the way of the acquisition being finalized in January 2008.
Though it drew a mixed reaction from analysts, the buyout of BioWare/Pandemic bolsters the largest third-party publisher's lineup with some marquee franchises. EA will own the Full Spectrum Warrior, Saboteur, and Mercenaries series and collect royalties on the Destroy All Humans! and Star Wars Battlefront games Pandemic developed.
The deal also makes EA a major player in the RPG market, adding Jade Empire and the forthcoming Mass Effect and Dragon Age to its trophy case. The deal will also have EA overseeing BioWare's partnership with LucasArts on an unnamed project--which is rumored to be a massively multiplayer online RPG based on the Star Wars: Knights of the Old Republic games.