The Largest Tech Acquisition Deal Ever: Dell Buys EMC for $67 Billion
Dell just made a huge deal, the largest tech acquisition deal ever, to be more precise. Dell buys EMC for $67 billion.
Reports say that the largest-ever technology merger was announced yesterday, when Dell agreed to buy storage technology firm EMC.
The deal is said to be worth over $67 billion, which makes it the largest tech acquisition ever.
EMC is probably worth a lot more than Dell at the moment, because it is involved in cloud services, storage, analytics, security, data visualization and so much more.
But Dell isn’t as bad as you think; after all they could afford to buy EMC for billions.
Thanks through financing through Silver Lake, Dell could afford the price tag. The deal has to go through some regulatory hurdles, which means the big $67 billion could change.
However, a part of EMC, VMware won’t be sold to Dell like the rest of the company. Instead, Dell will only own a majority stake in VMware and the company will stay privately held.
The deal has been kept incredibly secretive, with talks carried out between the CEOs Michael Dell and Joe Tucci at EMC, until yesterday when they announced it officially.
While the specifics of the deal still remain unclear, the Re/code suggests that “the secretive nature of the talks hints at the fact that numerous terms had not been finalized as of late Sunday night.”
And the deal might also include a clause which will allow EMC to identify other, higher offers.
EMC is specialized in digital storage, and combined with Dell’s hardware, as Bloomberg points out, the merger could “create one of the biggest providers of enterprise computing products.”
The merge will create an enterprise technology powerhouse. By acquiring EMC, Dell will have help diversifying and give it greater scale.
“Dell wants to become the old IBM, a one-stop shop for corporate clients. That model fell apart a couple of decades ago. Reviving it would be a stunning coup for Dell,” said Erik Gordon, clinical assistant professor at the University of Michigan’s Ross School of Business.
The $67 billion deal values EMC at $33.15 a share so Dell will pay $24.05 per share in cash. And will also give EMC shareholders a special stock.
EMC shares rose 3.9% to $29.08 on Monday in premarket trading. Dell will lead the combined company as chairman and chief executive.
“We’re creating an unbelievable powerhouse of an enterprise company,” the Dell chairman and CEO, Michael Dell, told CNBC’s “Squawk Box.”
“This is really all about bringing together complementary technologies and helping our customers address the challenges and opportunities that this digital future is creating.”