Consummating a deal that was rumored for much of last week, Dell this morning confirmed that it is acquiring search giant EMC and its myriad businesses for $67 billion, a record amount for the technology industry.
EMC’s most valuable piece, virtualization leader VMware, will continue as a publicly traded company, according to Dell.
From a Dell press release:
The combination of Dell and EMC will create the world’s largest privately-controlled, integrated technology company. The company will be a leader in the extremely attractive high-growth areas of the $2 trillion information technology market with complementary product portfolios, sales teams and R&D investment strategies. The transaction combines two of the world’s greatest technology franchises with leadership positions in servers, storage, virtualization and PCs and it brings together strong capabilities in the fastest growing areas of the industry, including digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security.
Dell reverted to being a private company in 2013. The combined Dell and EMC will provide a broad lineup of technologies for enterprises and small business, including servers, virtualization, security and PCs.
“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment. Our new company will be 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,” said (Chairman and CEO Michael) Dell. “Our investments in R&D and innovation along with our privately-controlled structure will give us unmatched scale, strength and flexibility, deepening our relationships with customers of all sizes. I am incredibly excited to partner with the EMC, VMware, Pivotal, VCE, RSA and Virtustream teams and am personally committed to the success of our new company, our customers and partners.”
Prior to this deal, the previously largest in tech industry history was the controversial 2003 acquisition of Compaq by Hewlett-Packard, which was valued at roughly half of what Dell is paying for EMC.
As reports of the possible acquisition emerged last week, there were a number of industry experts questioning whether it made sense given that both companies have had more than their share of challenges adapting to new industry realities. EMC announced major layoffs in January.
EMC chairman and CEO Joe Tucci, who had been looking for a path to retirement, will now stay on in his current role only until the deal closes. The Dell press release says EMC operations will continue to be headquartered in Hopkinton, Mass., where it has been a major employer for more than 30 years. (Disclosure: I live in Hopkinton.)