Computer maker Dell Inc said on Monday it had agreed to buy data storage company EMC Corp in a $67 billion record technology deal that will unite two mature companies and create an enterprise tech powerhouse.
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Founded in 1984, the Texas-based Dell has been struggling against the growing success of smartphones and tablets, and founder Michael Dell and private-equity firm Silver Lake Partners bought out other shareholders in 2013 to take the company private.
“Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT”.
Michael Dell will lead the combined company as chairman and chief executive officer.
“The transaction will unite Dell’s strength with small business and mid-market customers with EMC’s strength with large enterprises to fuel profitable growth and generate significant cash flows”, said Dell.
The Dell NZ boss said Michael Dell’s move to take his company private in 2012 (it was previously listed on the Nasdaq) had given it more flexibility.
“The bottom line, is that Dell-EMC combination will give Dell what it needs to compete with the likes of HP, Cisco, IBM and increasingly, lower-end players such as Huawei, analyst Glenn O’Donnel said per Computer World”. EMC was left with an 80% stake in VMware when it went public.
EMC is a cloud computing specialist, with extensive data storage technology assets.
The deal valued EMC at $33.15 a share as of the end of trading on Friday.
Further, if the Merger Agreement is terminated under certain specified circumstances and, within 12 months after such termination, EMC enters into a definitive agreement providing for, or consummates, an acquisition proposal, EMC must pay Parent a termination fee of $2.5 billion.
The merger has been approved by EMC’s board of directors but is subject to regulatory and EMC stockholder approvals.
“All of this at the very moment when we have completed our journey to create two new, focused companies”, she wrote.
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“EMC has been an anchor of the Massachusetts technology economy for decades, and the administration is optimistic that the newly combined Dell-EMC enterprise systems unit will have a robust presence locally for years to come”, Baker added.
