China Grants Clearance for Dell-EMC Merger
30 Agosto 2016 - 5:40PM
Dow Jones News
By Rachael King
Dell Inc. Tuesday said it received regulatory clearance from
China and intends to complete its merger with EMC Corp. on Sept. 7.
The $60 billion deal will be the largest technology merger
ever.
Approval from China's Ministry of Commerce was the last
remaining hurdle to the deal, which was approved by EMC
shareholders on July 19.
The newly combined company, to be named Dell Technologies, aims
to be a one-stop shop for information technology sold to
businesses.
Dell hopes to make the combined company a favored supplier in
the rapidly growing market for cloud computing, where companies tap
software programs via the internet.
Dell will face intense competition from Amazon.com Inc.'s Web
Services unit, the leader in the market. Amazon Web Services is so
far ahead in the cloud market, some analysts have questioned Dell's
ability to compete.
In an interview with The Wall Street Journal on Monday, Dell
Chief Executive Michael Dell said there will be room for other
competitors, particularly those selling to companies that want to
build their own cloudlike systems. While some predict that most
corporate computing will move to third-party systems like Amazon's,
"I think that's wrong," Mr. Dell said.
The market is in its early stages, and there will be many
different types of clouds, said Mr. Dell.
"There will be growth in the public clouds and still an enormous
amount of on-premise infrastructure, and there will be a lot of
service providers outside of the major clouds that are also
growing," he said.
The combined company will be the leading vendor by revenue in
the world-wide $29 billion market supplying hardware to
cloud-computing providers. In 2015, Dell and EMC combined garnered
18.2% of the highly fragmented market, according to market watcher
International Data Corp. That market is characterized by low-margin
hardware.
Dell, which is privately held, is buying not only EMC but its
federation of wholly and partially owned subsidiaries including
cybersecurity firm RSA Security LLC, software development company
Pivotal Software Inc. and virtualization software vendor VMware
Inc.
EMC shareholders will receive $24.05 a share in cash in addition
to a newly issued tracking stock linked to a portion of EMC's
economic interest in the VMware business. Based on the estimated
number of EMC shares outstanding at the close of the transaction,
EMC shareholders are expected to receive approximately 0.111 shares
of the new tracking stock for each EMC share.
Write to Rachael King at rachael.king@wsj.com
(END) Dow Jones Newswires
August 30, 2016 16:25 ET (20:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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