Computer giant Dell Inc announced Monday it was buying data-storage giant EMC Corporation for $67 billion, a mega merger in the technology industry. Dell, which founder Michael Dell and private-equity firm Silver Lake Partners bought out in 2013 to take the company private, said the acquisition of EMC, the world’s largest provider of data storage systems, “will create the world’s largest privately controlled, integrated technology company” in the $2 trillion information technology market.
The deal will make Dell “exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” Michael Dell, the PC maker’s chairman and chief executive, said in a statement. Under the terms of the agreed stock-and-cash deal, EMC shareholders will receive approximately $33.15 per share, or $24.05 per share in cash and a tracking stock linked to a portion of EMC’s stake in VMware, a provider of cloud services and software that will remain an independent, publicly traded company.
Changes in the industry “are unprecedented and, to navigate this change, we must create a new company for a new era,” said Joe Tucci, EMC chairman and chief executive. “I truly believe that the combination of EMC and Dell will prove to be a winning combination.” The EMC board of directors has approved the merger and will recommend approval by shareholders. Michael Dell will be the combined company’s chairman and CEO. Tucci will remain in his EMC position until the transaction closes. The transaction is expected to close between May and October next year.
Dell’s headquarters will stay in Round Rock, Texas, while the headquarters of the combined enterprise systems business will be in Hopkinton, Massachusetts, where EMC is based. Michael Dell created the company from his dorm room at the University of Texas and led it to become a global PC heavyweight known for direct service to customers. In 2013, he and Silver Lake led a $24.9 billion buyout to take the company private to give it more flexibility to face the challenges from diminishing PC sales and the shift to mobile computing.