Computer maker Dell along with MSD Partners and Silver Lake announced on Monday that it had agreed to buy data storage company EMC Corp in a $67 billion cash and stock. This is a record technology deal that will unite two mature companies and create an enterprise technology powerhouse.
“We’re creating an unbelievable powerhouse of an enterprise company,” said Dell Chairman and CEO Michael Dell. “This is really all about bringing together complementary technologies and helping our customers address the challenges and opportunities that this digital future is creating.”
EMC stockholders will receive about $33.15 per share out of which Dell will pay $24.05 per share in cash and a type of stock that is linked to “a portion of EMC’s economic interest” in its VMware business, which will remain an independent, publicly traded company.
This acquisition has proved to be a complete package for both Dell and EMC as independently both the companies weren’t viable over the long run as a standalone. Now Dell has both the hardware as well as the software storing units that will help the company place a strong foothold in the fast-growing market.
EMC will have a “go-shop” provision for 60 days that will allow the data storage company to seek out other buyers and give EMC a discounted breakup fee if it finds a more desirable deal. EMC Chairman and CEO Joe Tucci said, “We will do our duty to make sure we get the best deal for our shareholders and time will show.”
The transaction marks the largest technology sector deal on record, topping U.S. chipmaker Avago Technologies’ $37 billion offer for rival Broadcom. That deal is still in process.