Deal is the biggest seen in tech industry, and could see some of virtualisation software company VMware sold off
Dell has agreed the biggest takeover in technology history, buying data storage provider EMC for $67bn (£44bn).
The American company, founded by its billionaire chief executive Michael Dell more than 30 years ago, announced the deal on Monday.
It will create the world’s biggest privately-held technology company and crystallise Dell’s transformation from what was once the world’s biggest PC manufacturer into an IT services giant.
Mr Dell and his private equity backers Silver Lake Partners took Dell private two years ago, as the PC industry was falling into decline, and promised to turn it into a leaner IT company with higher profit margins.
Since then, the PC slump has worsened, with sales now down more than 25pc down on their peak, but Dell still makes just over half its money from computers. To buy EMC, it is arranging billions in debt financing.
The deal is a complicated transaction, with EMC investors receiving $24 a share as well as a “floating” share that represents the public value of VMware, a desktop virtualisation software maker that EMC owns 81pc of. This values the deal at roughly $67bn.
“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment,” Mr Dell said .
EMC, based in Massachusetts, is the world’s largest seller of data storage systems, as well as providing cloud computing and security to businesses.
Mr Dell founded the company that bears his name in his university dorm in 1984. Its custom-made designs helped it become the biggest PC manufacturer in the early 2000s, but cheap competition from Lenovo and the rise of HP set it back.
With the entire PC market seeing sales fall, it went private for $24bn in 2013, enabling it to turn around without pressure from public shareholders.
This article was written by James Titcomb from The Daily Telegraph and was legally licensed through the NewsCred publisher network.