Electronic Arts has entered into an agreement to acquire BioWare and Pandemic.
In truth, Electronic Arts will pay $620 million in cash to VG Holding Corp, a company that owns both BioWare and Pandemic and is owned by Elevation Partners (The investment firm best known for Bono's involvement). EA will also give certain key employees of BioWare and Pandemic up to $155 million in EA stock, subject to certain conditions (including performance and time-based criteria).
The transaction should close in January, and while it will hurt EA's financials in the short term, in time it seems likely to help EA's overall performance. Both groups and their nearly 800 employees will join the EA Games label.