Assuming it gains regulatory approval, the EMC deal will see Dell inherit business across a wide swathe of corporate New Zealand and government, where EMC’s storage technology is a mainstay.
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In what Dell is calling the “world’s largest privately-controlled, integrated technology company” the company has made a deal worth billion to buy data storage giant EMC. According to analysts, the acquisition announced by Dell today marks its latest attempt to lessen its dependence on the PC industry that it helped pioneer as demand for desktop and laptop machines weaken amid growing popularity of smartphones and tablets which is a huge negative for the company. It also makes servers and owns security company RSA, which is known for its hard-to-crack SecurID tokens.
The tie-up comes almost two years after Dell went private in a $25 billion buyout by its founder, Mr. Dell, and Silver Lake.
EMC will pay up to $2.5 billion in termination fees to Dell if the data-storage company accepts a proposal from rivals and rejects the Dell offer.
“The combination of Dell and EMC creates an enterprise solutions powerhouse”, said Dell in a prepared statement.
The transaction signs the largest technology sector agreement on record, topping United States chipmaker Avago Technologies’ $37 billion offer for competitor Broadcom, CNBC said.
EMC’s share price had declined almost 15 percent over the past year before getting a boost last week by news of the Dell takeover. VMware will remain publicly traded under the agreement.
According to sources at Dell, the partnership “brings together the industry’s leading innovators in digital transformation, software-defined data centre, hybrid cloud, converged infrastructure, mobile and security”.
The deal is a major step for Dell, moving it away from the flagging PC market into the potentially more lucrative (and wider) world of enterprise technology. But the merger certainly bucks the recent trend of large tech companies getting smaller instead of bigger. The exact cost of Dell and EMC deal will depend on the value of VMWare’s shares.
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Michael Dell, who founded the eponymous computer maker, and EMC boss Joe Tucci insisted it will create opportunities to grow both businesses.
