Dell to acquire EMC in a record $67bn deal

|October 12, 2015 0

BANGALORE, INDIA: Dell has inked perhaps the largest deal in the tech history so far, as the privately run PC vendor has agreed to acquire data storage vendor EMC for approximately $67bn.

EMC shareholders would receive a total combined consideration of $33.15 per EMC share, that includes $24.05 per share in cash in addition to securities tied to the value of VMware.

VMware, however, will remain a publicly-traded company.

The deal brings together two of the world’s greatest technology franchises with leadership positions in servers, storage, virtualization and PCs.

It also brings together strong capabilities in the fastest growing areas of the industry, including digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security.

The transaction is expected to be financed through a combination of new common equity from Michael S. Dell, MSD Partners, Silver Lake and Temasek, the issuance of tracking stock, as well as new debt financing and cash on hand.

“Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” said Michael S. Dell, founder, chairman and chief executive officer of Dell.

“I’m tremendously proud of everything we’ve built at EMC – from humble beginnings as a Boston-based startup to a global, world-class technology company with an unyielding dedication to our customers,” said Joe Tucci, chairman and chief executive officer of EMC. “But the waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era.”

Michael Dell and related stockholders will own approximately 70 percent of the company’s common equity, excluding the tracking stock, similar to their pre-transaction ownership.

Following completion of the transaction, Michael Dell will lead the combined company as chairman and chief executive officer. Joe Tucci will continue as chairman and chief executive officer of EMC until the transaction closes.

Dell’s headquarters will remain in Round Rock, Texas, and the headquarters of the combined enterprise systems business will be located in Hopkinton, Mass.

The transaction is expected to close in the second or third quarter of Dell’s fiscal year ending February 3, 2017 (within the months of May to October 2016).

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