I wrote about M&A deals in December 2013 and December 2014. I predicted that the M&A deals would increase and Michael Dell know as many other CEO`s that this is the right time to acquire and merge. Dell announced it will acquire EMC Corporation today.
This is one of the biggest tech acquisitions ever! The biggest acquisition is the disastrous AOL – Time Warner merger in 2000. An event I remember very good. The Dell/EMC deal is the second largest.
Michael Dell and his company Dell Inc revealed monday that they will acquire EMC Corporation for about $67 billion in cash and stock. Chairman Michael Dell is now creating a very powerful powerhouse enterprise company.
I don`t think HP like this deal at all, because the demand is still declining while the competition is very tough. With this acquisition, Dell will try to build a tech giant with a wider product lineup and get a profitable edge over their competitors.
EMC Corp operates in the Data Storage Devices industry, and it operates in three segments: EMC Information Infrastructure, Pivotal and Vmare Virtual Infrastructure. If you are a EMC shareholder, you will get $24,05 per share in cash as well as tracking stock linked to EMC`s interest in VMware.
You will get about 0,111 shares of new VMware tracking stock per share, and the deal will close next year.
VMware declined over 9 percent on news on the Dell/EMC deal, but it’s up again from start Monday. At the same time, VMware pre-announced it expected Q3 revenue of $1,672 billion, which is up +10 percent Y/Y, with a EPS of $1,02. Total revenue is expected to come in at only 3 percent. Look out for full Q3 results on October 20.
The company can become a takeover target for larger tech companies in the future, and VMware can be candy for HP, Oracle or Cisco Systems Inc to name a few.
EMC rose over 9 percent in pre-market trading Monday in New York. EMC has pre-announced it expected Q3 revenue of $6,05 billion to $6,08 billion, with a EPS of $0,43, which is below consensus of $6,25 billion and $0,45.
Dell had stakes in four different firms in 1999 and 2000, but have since then acquired plenty of different tech companies. They had a stake in Fast Search & Transfer with a value of $25,200,000 in January 31, 2000.
Most of the companies that they have acquired is U.S companies and this is the way Dell has expanded. The acquisition today is the biggest ever, and Dell has about 111,000 employees with $57,2 billion in sales last year. EMC is a leader in cloud-based storage and pulled in$24,4 billion in 2014.
The Dell and EMC deal will make them one of the world`s largest privately held tech company.