Tech giants Dell and EMC have announced a definitive agreement worth $67 billion (£43.7bn) which claims to “bring together the industry’s leading innovators in digital transformation, software-defined data centre, hybrid cloud, converged infrastructure, mobile and security.”
Under the terms of the agreement, which will according to the two companies create “the world’s largest privately-controlled, integrated technology company,” EMC stockholders will receive approximately $33.15 per share. Dell also confirmed VMware will remain an independent, publicly traded company.
Michael Dell, CEO of Dell, said: “The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers 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 am incredible excited to partner with the EMC, VMware, Pivotal, VCE, ERS and Virtustream teams and am personally committed to the success of our new company, our customers and partners,” he added.
Joe Tucci, EMC CEO, added: “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.”
Reaction to the news was mixed. Elliott Management, a large stockholder of EMC, said in a statement it “strongly supports” the deal. “This landmark transaction will create a powerhouse with leading franchises across enterprise IT,” they said. Others were less charitable. Writing for WIRED, Cade Metz described Dell and EMC, along with HP, Cisco, IBM and Oracle, as “the walking dead”, as cloud services and open source moves ever closer to gobbling up legacy software and hardware.
A year ago, EMC announced a raft of merger and acquisition activity, buying open cloud provider Cloudscaling for a figure south of $50 million before buying out all but 10% of Cisco’s stake in data centre firm VCE. EMC pre-announced its third quarter earnings and sales alongside the acquisition news, with adjusted earnings per share and revenue at 43 cents and $6.05bn to $6.08bn, below the FactSet consensus of 48 cents and $6.24bn respectively.