Dell-EMC Merger the Biggest in the Tech Industry
Dell-EMC Merger the Biggest Ever in the Technology Sector
Key highlights of Dell-EMC merger
The tech industry witnessed its biggest merger of all time on October 12, 2015, when Dell and EMC Federation (EMC) announced a merger valued at approximately $67 billion. According to a rough estimate, the deal will bring EMC’s share value to $33.15—a premium of ~28% from the price before the news of a possible deal was leaked. Dell will own approximately 70% of EMC’s common equity. The deal will earn Elliott Management, which owns a 2.2% share of EMC, a profit of about 20%, according to a Financial Times article.
Rumor turned reality
The news of a possible merger between the two companies was leaked by unnamed sources on October 8, 2015, which saw shares rise by 4% to $27.06. In this series, we’ll explore the details and synergies of the merger, as well as the impact of the deal on the competitive tech landscape.
Dell-EMC merger a threat to big tech giants
The combined company will deliver end-to-end technology solutions, giving tough competition to players such as Hewlett-Packard (HPQ) and IBM (IBM), who offer complete enterprise computing services. The merger will force networking giant Cisco (CSCO) to look for a storage acquisition in order to remain competitive.
About EMC
Founded in 1979, EMC Federation provides a complete suite of enterprise solutions through independent companies.
EMC Information Infrastructure provides storage solutions.
RSA provides security solutions.
Pivotal provides cloud platform and agile development solutions.
VMware (VMW) provides virtualization solutions.
VCE provides converged infrastructure solutions.
EMC, headquartered in Hopkinton, Massachusetts, has a market capitalization of $53.62 billion and posted a revenue of $24.4 billion in fiscal 2014. The company employs about 70,000 people worldwide.
About Dell
Founded in 1984 by Michael Dell, Dell is a provider of computers and servers. The company went private in 2013 under a $24.9 billion buyout by Michael Dell and private-equity firm Silver Lake. Headquartered in Round Rock, Texas, the company employs more than 110,000 employees worldwide and posted revenue of $57.2 billion in fiscal 2014.
If you are bullish about VMware, you can invest in the SPDR Morgan Stanley Technology ETF (MTK), which has 2.3% exposure in the company’s stock.
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