Industry & Business

Dell expected to announce $53 billion EMC merger today

Dell expected to announce $53 billion EMC merger today

Dell expected to announce $53 billion EMC merger today
October 12
08:33 2015

Dell will announce Monday that it’s acquiring data storage provider EMC, according to a person familiar with the matter, creating a corporate-computing giant in the largest-ever technology merger.

Dell plans to pay slightly more than $25 a share in cash, plus tracking stock in cloud software maker VMware valued at about $8 for each EMC share, said the person.

Dell, Emc and VMware employ more than 6,000 people in Ireland. EMC has a workforce of over 3,000, most of which are based in Cork, while Dell employs over 2,300 across three sites in Dublin, Cork and Limerick. VMware, which EMC is the parent company of, employs more than 700 people in Cork.

EMC established a presence in Ireland in 1988 with its first manufacturing facility outside of North America in Ovens, Cork, followed by sales offices in Dublin (1990) and Belfast (2005). The Cork facility is the largest manufacturing site of EMC outside of the US, and in 2009 it became a a Centre of Excellence incorporating research and training.

Dell’s Innovation Centre in Ireland is one of the largest customer centres of its kind in the country.

It is uncertain whether the deal, which would the the largest ever techhnology merger, would have any impact on Irish jobs.

The deal hasn’t been signed yet because the parties as of late Sunday were said to be still negotiating a so-called collar around the VMware stock.

In a stock merger agreement, collars offer buyers and sellers protection against steep fluctuations in the price of a security in the time between signing the deal and closing.

Dell is speaking to banks about raising at least $40 billion to finance the purchase, a person with knowledge of the matter has said.

VMware, which makes tools that help servers run software more efficiently, is valued at $32.3 billion, while EMC has a market capitalisation of $53.6 billion.

The deal would eclipse the pending $37 billion Broadcom-Avago merger, currently the biggest tech tie-up.

“This merger bodes well for the next generation of innovator,” said Matt McIlwain, a managing director at Madrona Venture Group, which invested in Isilon, which EMC acquired, and other storage startups that compete with EMC.

“Legacy tech companies have little alternative than to use financial engineering to keep shareholders happy in an era of fundamental technology disruption.”

Dave Farmer, a spokesman for Massachusetts-based EMC didn’t immediately respond to messages seeking comment. Jim Hahn, a spokesman for Dell, declined to comment.

About Author



Related Articles

New Subscriber

[contact-form-7 id=”65829″ title=”Subscriber”]


National Manufacturing Conference & Exhibition 2018

NIBRT Springboard Success Stories

Upcoming Events