The combined company will be a leader in servers, storage, virtualization and the converged IT infrastructure market. The combination of Dell and EMC will create the world’s largest privately-held technology company. Dell and EMC will address the growing demand of large and small customers’ changing IT needs because the acquisition enables Dell to grab EMC, VMware, Pivotal, VCE, RSA and Virtustream.
HIGHLIGHTS OF DELL-EMC DEAL
# Dell buys EMC for $67 billion
# Dell CEO Michael S Dell gets support from MSD Partners and Silver Lake
# VMware will be publicly-traded company
# The largest technology deal
# EMC shareholders to receive $33.15 per EMC share
# Dell and EMC will create the world’s largest privately-held technology company
# Michael S Dell will be the CEO
# Dell grabs EMC, VMware, Pivotal, VCE, RSA and Virtustream
Dell does not talk about the possible job cut and share information about cost savings.
Dell CEO Michael S Dell is supported by MSD Partners and Silver Lake, two technology investing companies, for buying EMC and its subsidiary companies in the largest ever technology deal. When Dell went public in 2012, IBM supported Dell.
VMware, EMC’s cloud infrastructure subsidiary, will be maintained as a publicly-traded company.
EMC will have a go-shop provision that will allow the data storage company to seek out other buyers — possibly HP, and Cisco — and give EMC a discounted breakup fee if it finds a more desirable deal, said EMC chairman and CEO Joe Tucci. Tucci will step down after completing the technology deal.
The deal between Dell and EMC will be the largest technology deal till today.
PREVIOUS BIG TECH DEALS
Dell – EMC (2015): $67 billion
HP – Compaq (2001): $25 billion
Facebook – WhatsApp (2014): $19 billion
HP – EDS (2008): $13.9 billion
Symantec – Veritas (2004): $13.5 billion
Google – Motorola Mobility (2011): $12.5 billion
Oracle – PeopleSoft (2005): $10.3 billion
HP – Autonomy (2011): $10.3 billion
Microsoft – Skype (2011): $8.5 billion
Oracle – BEA Systems (2008): $8.5 billion
Oracle – Sun Microsystems (2010): $7.4 billion
Microsoft – Nokia (2013): $7.2 billion
EMC shareholders will receive $24.05 per share in cash in addition to tracking stock linked to a portion of EMC’s economic interest in the VMware business. EMC shareholders would receive $33.15 per EMC share and the total transaction would be valued at approximately $67 billion.
— Dell (@Dell) October 12, 2015
The Dell and EMC combination will be a leader in the high-growth areas of the $2 trillion information technology market with complementary product portfolios, sales teams and R&D investment strategies.
EMC and Dell combines their positions in servers, storage, virtualization and PCs. The new entity will target digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security.
“Our investments in R&D and innovation along with our privately-controlled structure will give us unmatched scale, strength and flexibility, deepening our relationships with customers of all sizes,” said Dell.
CEO 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.
Dell will lead the combined company as chairman and chief executive officer. Dell’s headquarters will remain in Round Rock, Texas, and the headquarters of the combined enterprise systems business will be located in Hopkinton, Mass.
EMC said its consolidated revenue is expected to be between $6.05 and $6.08 billion in the third quarter of 2015.