Dell To Acquire EMC In $67 Bln Deal

(RTTNews) - Dell Inc. and EMC Corp. (EMC) have signed a definitive agreement for Dell to acquire EMC, while maintaining VMware as a publicly-traded company, in a transaction that would be valued at around $67 billion.

The acquisition will be made by Dell, together with its owners, Michael Dell, founder, chairman and chief executive officer of Dell, MSD Partners and Silver Lake. The transaction is expected to close in the second or third quarter of Dell's fiscal year ending February 3, 2017.

EMC shareholders will receive $24.05 per share in cash in addition to tracking stock linked to a portion of EMC's economic interest in the VMware business.

Based on the estimated number of EMC shares outstanding at the close of the transaction, EMC shareholders are expected to receive about 0.111 shares of new tracking stock for each EMC share.

Assuming a valuation for each share of tracking stock of $81.78, the intraday volume-weighted average price for VMware on October 7, EMC shareholders would receive a total combined consideration of $33.15 per EMC share and the total transaction would be valued at approximately $67 billion.

The EMC Board of Directors approved the merger agreement and intends to recommend that the company's stockholders approve the agreement.

The transaction is expected to be financed through a combination of new common equity from Michael Dell, MSD Partners, Silver Lake and Temasek, the issuance of tracking stock, as well as new debt financing and cash on hand. There are no financing conditions to the closing of the transaction.

The deal brings together two heavy weights in digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security.

The combination is expected to create the world's largest privately-controlled, integrated technology company. The company will be a leader in the attractive high-growth areas of the $2 trillion information technology market with complementary product portfolios, sales teams and R&D investment strategies.

Once the deal is done, Dell and related stockholders will own 70 percent of the company's common equity, excluding the tracking stock, similar to their pre-transaction ownership.

Dell will lead the combined company as chairman and chief executive officer. Joe Tucci will continue as chairman and chief executive officer of EMC until the transaction closes.

Dell's headquarters will remain in Round Rock, Texas, and the headquarters of the combined enterprise systems business will be located in Hopkinton, Massachusetts.