BY Fraser Tennant
In the biggest deal ever seen in tech history, Dell Inc. has announced that it is to acquire EMC Corporation in a transaction valued at approximately $67bn.
The combination of Dell and EMC will create a technology giant with leadership positions in servers, storage, virtualisation and PCs, as well as bringing together strong capabilities in the fastest growing areas of the $2 trillion information technology market.
Additionally, the transaction is expected to unite Dell’s expertise with small business and mid-market customers with the strength EMC demonstrates in dealing with large enterprises.
“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 S. Dell, founder, chairman and chief executive officer of 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 EMC and am personally committed to the success of our new company, our customers and partners.”
Under the terms of the definitive agreement, which has been approved by the EMC board of directors, Mr Dell and related stockholders will own approximately 70 percent of the combined company’s common equity, excluding the tracking stock, similar to their pre-transaction ownership.
“I’m tremendously proud of everything we’ve built at EMC – from humble beginnings as a Boston-based start-up 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.”
Following the completion of the acquisition, Mr Dell will lead the combined entity as chairman and chief executive officer. Mr Tucci will continue as chairman and chief executive officer of EMC until the ultimate closure of the transaction.
The transaction is subject to customary conditions, including receipt of required regulatory and EMC stockholder approvals, and is expected to close in the second or third quarter of Dell’s fiscal year ending 3 February 2017.