There has been speculation for quite some time that the days of EMC being an independent entity were numbered with potential suitors looking to pick up the storage giant.
At the very least the expectation was that the vendor would be encouraged to sell-off VMware as it looked to ensure it was in the right shape to face the future.
It has now been confirmed that Dell has emerged as the front runner after tabling a $67bn bid for the storage firm. The offer if it goes through would be the largest ever seen in the IT industry and would result in VMware remaining as a listed company.
The announcement that Dell and EMC has signed a definitive agreement to with Michael Dell along with his backers MSD Partners and Silver Lake valued the firm at $33.15 per share. That includes $24.05 in cash and the rest in securities tied to the value of VMware.
According to reports Dell is currently talking to banks in an effort to get around $40bn in funding to make sure that the deal can go through.
Michael Dell along with EMC so Joe Tucci will take to the phones later today to give analysts more meat on the bones but already the rationale for the deal has been outlined to investors.
“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment. 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 Dell.
Not only would the deal mark a watershed in the IT industry because of its size and ambition but it also underlines the benefits that Dell said would emerge from its decision to return to private ownership two years ago.
At that point the management said that it would be able to get away from quarterly market pressures and make strategic decision based on the long term.
“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,” said Joe Tucci, chairman and CEO of EMC.
“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 the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders,” he added.
Tucci has already made it clear in the past that he is heading for retirement and the plan after the deal closes is that Michael Dell would lead the combined company as chairman and CEO.