Dell to Acquire EMC in $67 Bn Deal, Forming a Tech Powerhouse

Dell Inc. announced a definitive agreementlong-term to acquire EMC Corporation, backed by Michael S. Dell, MSD Partners, and Silver Lake. The deal values EMC at approximately $67 billion, using a mix of cash and tracking stock tied to VMware’s performance.

Under the deal, EMC shareholders will receive $24.05 per share in cash plus tracking shares that reflect a stake in VMware. Each EMC share will translate to roughly 0.111 shares of the new tracking stock. VMware, however, will remain a publicly traded entity.

Dell’s leadership sees the merger as a chance to build the “world’s largest privately controlled, integrated technology company.” According to Dell, the combined entity will dominate key growth areas like software-defined data centers, hybrid cloud, converged infrastructure, and security, while maintaining agility in product innovation.

Michael Dell said, “The combination of Dell and EMC creates an enterprise solutions powerhouse… bringing industry-leading innovation across their entire technology environment.  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’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.”

The transaction — structured through new equity from Dell, MSD Partners, and Temasek, plus a combination of debt — is expected to close between May and October 2016, contingent on regulatory and shareholder approvals.

“We believe the strategic integration of EMC and Dell will generate unparalleled depth and breadth across servers, storage, virtualisation and the next era of converged infrastructure, creating a global technology platform poised for sustained long-term growth and innovation in the years to come,” Egon Durban, managing partner of Silver Lake, said.

With this bold move, Dell is doubling down on scale and integration, effectively reinventing itself to compete across both consumer and enterprise domains.