Menu
Dell poised to open up about potential VMware merger plans

Dell poised to open up about potential VMware merger plans

The options could include a possible reverse merger with VMware or an IPO

Michael Dell - Chairman and CEO, Dell Technologies

Michael Dell - Chairman and CEO, Dell Technologies

Dell Technologies and business software provider VMware have decided to explore options that could include a potential merger of the two companies, people familiar with the matter have said.

VMware is 80 per cent-owned by Dell.

Dell plans to announce as early as Friday (in the United States) that it will review a possible reverse merger with VMware, as well as other alternatives, including an initial public offering or asset divestitures, the sources said.

VMware plans to announce that it will form a special committee of board directors to consider a combination with Dell, the people added.

The sources asked not to be identified because the matter is confidential. Dell and VMWare did not immediately respond to requests for comment.

It emerged on 26 January that Dell Technologies was exploring a range of options that could see the world's largest privately held technology company grow further through acquisitions or go public, according to people familiar with the matter.

The Round Rock, Texas-based company, headed by founder Michael Dell, is under pressure to boost its profitability after its US$67 billion acquisition of EMC in 2016 failed to deliver the cost savings and performance it projected, while higher component costs and a challenging data storage market have eroded its margins.

Dell is reviewing a list of several possible acquisition targets that would boost its cash flow and expand its offerings, sources said.

Dell's review is at its very early stages and no deal is certain, according to the sources, who requested anonymity to discuss the deliberations.

Dell is also considering a sale or initial public offering (IPO) of its one of its fast-growing divisions, Pivotal Software Inc, the sources said. It may also consider a transaction with its majority-owned VMware Inc, a virtualization software maker.

VMware shares, which have gained more than 62 per cent in the past 12 months, touched an all-time high last week.

(By Liana B. Baker and Greg Roumeliotis; Editing by Leslie Adler; With reporting by Greg Roumeliotis and Liana B. Baker; additional reporting by Ismail Shakil; Editing by Amrutha Gayathri and Jacqueline Wong)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags VMwareDellDell Technologies

Featured

Slideshows

Malwarebytes shoots the breeze with channel, prospects

Malwarebytes shoots the breeze with channel, prospects

A Kumeu, Auckland, winery was the venue for a Malwarebytes event for partner and prospect MSPs - with some straight shooting on the side. The half-day getaway, which featured an archery competition, lunch and wine-tasting aimed at bringing Malwarebytes' local New Zealand and top and prospective MSP partners together to celebrate recent local successes, and discuss the current state of malware in New Zealand. This was also a unique opportunity for local MSPs to learn about how they can get the most out of Malwarebytes' MSP program and offering, as more Kiwi businesses are targeted by malware.

Malwarebytes shoots the breeze with channel, prospects
EDGE 2019: Channel forges new partnerships during evening networking

EDGE 2019: Channel forges new partnerships during evening networking

Partners, vendors and distributors reconnected during a number of social gatherings during EDGE 2019. The first evening saw the channel congregate for a welcome party at the Hamilton Island yacht club, while the main poolside proved to be the perfect stop for a barbecue on the final night.

EDGE 2019: Channel forges new partnerships during evening networking
Show Comments