Dell to buy EMC for $67b

“EMC is a well-diversified systems vendor and systems integrator that has a fair degree of complementary value to Dell at a product portfolio level and also at market level”, Perez said.

Dell, along with MSD Partners and Silver Lake, has bought EMC for $67 billion, making it the largest tech deal in history.

The India market at this point of time is opportune for a Dell-EMC deal to take place considering India is still a host to a large number of organisations who are yet to shift workloads to the cloud.

However, both companies face a certain amount of overlay in offerings when it comes to storage and servers.

“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”, said Michael S. Dell.

When Dell made a decision to take itself private in 2013, the move was somewhat controversial. It’s hard to determine if this strategy paid off in terms of earnings because Dell stopped issuing financial statements after it went private. The board of EMC, based in Massachusetts, has approved the deal, and the two companies signed an agreement Monday. It doesn’t appear that Dell CEO Michael Dell is just spinning hype when he talks about the synergies of the deal.

“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”, he added. EMC did not want to relinquish control of the unit because it complements EMC’s other businesses and has the potential to work well with Dell. “I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders”.

EMC shareholders will be called upon to vote on the deal with Dell in the new year, provided a 60-day “go-shop” period does not result in a higher offer, which most industry experts consider unlikely. There are no financing conditions to the closing of the transaction.

EMC will also pay an additional $2.5 billion (roughly Rs. 16,283 crores) if it enters into a deal with another company within 12 months of terminating the deal with Dell. We caught up with Rob Enderle, principal analyst at the Enderle Group, to get his thoughts on the mega merger. “We will have to spend a lot more time with our shareholders explaining what is going on with the tracking stock”, David Goulden, Chief Executive of EMC Information Infrastructure, the company’s biggest division, told Reuters in an interview.

If it was about on-premise software and hardware, this merger would be a “juggernaut super combination”, but since much of the future load will run in the cloud, the new Dell has to find a path beyond serving as an original equipment manufacturer for public clouds, he said.