IT'S OFFICIAL. Dell has confirmed that it's buying data centre giant EMC for a cool $67bn, a deal that sees the company transforming from a consumer PC business into an IT solutions provider.
The purchase is the biggest technology acquisition to date, topping Avago Technologies' $37bn offer for Raspberry Pi chipmaker Broadcom in May.
The eye-watering $67bn deal sees Dell setting its sights firmly on the enterprise market, combining EMC's digital storage business with Dell's own server and IT services. The move will soften the blow of its struggling PC business, after Gartner confirmed last week that PC sales shrank 7.7 percent in the third quarter.
Dell picks up EMC's majority 81 percent share in VMware as part of the acquisition, but said that the virtualisation outfit will remain an independent, publicly-traded company. Dell said on a call with The INQUIRER that it won't pick VMware as its exclusive virtualisation partner, however.
A report in The New York Times said that the deal isn't as straightforward as it sounds. It reportedly includes a 'go-shop' provision that allows EMC to consider bids from rival firms to ensure that EMC investors get the best value from any sale.
Dell CEO Michael Dell said that the purchase transforms his company into an enterprise behemoth with a focus on next-generation IT, including hybrid cloud and converged infrastructure.
"The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry-leading innovation across their entire technology environment," he said.
"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 centres, converged infrastructure, hybrid cloud, mobile and security.
"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 the EMC, VMware, Pivotal, VCE, RSA and Virtustream teams, and personally committed to the success of our new company, our customers and partners.”
Dell remained coy when quizzed about potential job losses, however, saying that any potential cuts won't be known until 2016.
Joe Tucci, chairman and chief executive of EMC, added: "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.
"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 EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders."
The transaction is expected to close in the second or third quarter of Dell's fiscal year, and has already been approved by EMC shareholders.
This deal proves Michael Dell's previous claims that he is not a believer in getting smaller and sleeker. He recently slammed HP for its decision to split in two, which takes effect on 1 November. µ
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