A combination of Dell Inc. Founder, Chairman, and CEO Michael Dell, MSD Partners, and Silver Lake have agreed to acquire fellow IT technology company EMC Corp. for $24.05 per share in cash, as well as tracking stock linked to a portion of EMC's interest in VMware. The transaction could be worth as much as $67 billion, depending upon the value of the tracking stock and that of VMware.
VMware would remain an independent, publicly traded company, the parties added.
Dell believes the deal, which the parties expect to close between May and October 2016, will create the world's largest IT-focused company with a leadership position in servers, storage, virtualization, and PCs.
"The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry-leading innovation across their entire technology environment. 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 Dell. "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. I am incredibly excited to partner with the EMC, VMware, Pivotal, VCE, RSA, and Virtustream teams and am personally committed to the success of our new company, our customers and partners."
"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," added Joe Tucci, chairman and CEO 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."
Michael Dell and related stockholders would own approximately 70% of the combined company's common equity, excluding the tracking stock. The parties expect to fund the acquisition via a combination of new common equity from Michael Dell, MSD Partners, Silver Lake, and Temasek (an investment company based in Singapore); the issuance of tracking stock; new debt financing; and cash on hand. There are no financing conditions to the closing of the transaction, the parties assert.
Reuters reports that the agreement provides EMC an option that expires in 60 days to shop for a better offer; if found, EMC would pay a discounted breakup fee.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer's Guide.