Dell and private equity firm Silver Lake said Monday they would buy EMC for $33.15 a share for a total price tag of about $67 billion in the largest deal in technology industry history.
Shares of EMC rose 8% in pre-market trading.
Dell is offering EMC shareholders about $24.05 a share in cash and $9.10 of a tracking stock tied to EMC’s VMware stake. EMC bought VMware in 2004 for $625 million. EMC was left with an 80% stake in VMware when it went public.
The deal is a major coup for company chairman and CEO Michael Dell, who two years ago took the personal computer maker he founded private with financial backer Silver Lake in a $25 billion buyout. It also marks a major milestone in his march to reinvent Dell as an enterprise player focusing on storage and security. EMC has been negotiating with Dell and Silver Lake on a sale after previous talks with Hewlett-Packard collapsed.
“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment,” said Dell in a statement issued with the deal announcement. “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.”
SOURCE: Jessica Guynn