Dell and EMC merger could be largest tech merger of all time

8 Oct 2015

Dell CEO, Michael Dell. Image: Oracle PR

In what could be the largest tech merger of all time, Dell and EMC are in discussions to bring the two companies together, with the latter under pressure to boost its stock price.

According to industry insiders and those in the know, the Dell and EMC merger is close to completion, with an announcement expected within the next week, as Dell looks to expand its big-data storage reach – an area in which EMC has been a leader for some time.

According to the Wall Street Journal, the crux of the deal that will see Dell bring EMC into the fold involves EMC’s VMWare spinning off to form its own company, a move the cloud computing company has been eyeing for over a year now.

EMC owns an 80pc stake in VMWare, which was most recently valued at US$34bn.

If the Dell-EMC merger is completed, it would cement the once consumer-targeted computer company as one firmly placed to run the ICT of major corporations.

In terms of financial figures, it is believed that the deal will set Dell back somewhere in the region of US$50bn, close to EMC’s market valuation.

If completed, the deal would surpass the previous record-holding tech-buying-tech merger – Avago Technologies’ acquisition of Broadcom for US$37bn.

With EMC’s quarterly report earnings to be announced on 21 October, it is expected that, should a deal be agreed between the two companies, it would need to be confirmed before then in order to meet the earnings report deadline.

There are further questions, however, over the financing of the deal, as Dell is still currently in debt to the tune of US$11.7bn.

Meanwhile, EMC is still in possession of a software-development company called Pivotal, and the network-security provider RSA, with no confirmation coming as to whether they would fall under the Dell umbrella.

Colm Gorey was a senior journalist with Silicon Republic