Dell announces record-breaking $67 billion EMC takeover
Dell has just announced that it is acquiring data storage firm EMC corp for $67 billion (£44 billion) in what is a record-breaking technology merger.
As part of the deal, EMC shareholders will receive $33.15 per share, with $24.05 of that in cash.
“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 centre, converged infrastructure, hybrid cloud, mobile and security,” said Michael Dell.
Michael Dell will be the chairman and chief executive of the new group. EMC’s CEO Joe Tucci will continue as chairman and chief executive officer of EMC until the transaction closes.
“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. I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders.”
Unnamed sources leaked information ahead of the seismic tech deal. Bloomberg Business reported earlier today that, due to the size of the deal, top executives at Dell haven’t been consulted on the talks. The deal has allegedly been reached directly between Dell and Tucci.
The takeover signals the creation of a new corporate computing titan, combining EMC’s pre-eminence in the digital storage space with Dell’s market for servers. This signals a decided move for Dell to dominate the enterprise computing space, allowing the company to expand its line in high-end data-storage equipment and entice clients away from rivals such as HP and IBM.
Sources previously told Reuters that EMC has requested a ‘go-shop’ provision on the merger agreement, which would allow the company to accept a superior deal from another company, and then pay Dell a discounted breakup fee. The chances of rival companies such as IBM and Cisco stepping up to the deal were unlikely, and haven’t transpired. It is thought that this clause was intended to convince EMC shareholders that a deal with Dell is the best possible outcome.
The deal had reportedly been held up with negotations about EMC’s stake in VMware – a virtualisation and cloud software firm. The deal states that VMware will remain an independent, listed company.
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