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EMC is getting a Dell, dude. Lots and lots of them, probably. Dell Inc. announced today that it has completed its $60 billion merger with EMC, the data storage company.
The news marks the culmination of the largest technology sector merger ever and leaves Dell, with $74 billion in revenue, as the largest privately controlled tech company in the world.
Dell became one of the world's biggest tech companies on the strength of its computers. (The company's founder, Michael Dell, started building PCs in his dorm room in 1984.) But the tech market's attention has moved increasingly away from products like physical computers to cloud computing and data analytics.
That's where EMC comes in. EMC focuses on data storage, security, cloud products, and analytics. Combining the two allows the companies to provide a more "holistic" range of IT services to clients. It may also help Dell expand its reach. Dell is the third largest international seller of PCs, but PC shipments have been dropping for years. EMC, meanwhile, is ranked as the number-one vendor by sales, according to the Wall Street Journal, with extensive inroads into large enterprises.
Accomplishing the Dell-EMC merger was no easy feat. Announced last October, the deal required Dell to raise more than $40 billion in debt and $5 billion through the sale of its IT-services and software divisions. To give you a sense of how big that is, HP's Meg Whitman estimated last year that the deal would leave Dell with a yearly bill of nearly $2.5 billion in interest alone.
And, of course, the merger is hardly straightforward. The Journal describes the deal as "extraordinarily complex," explaining:
Dell, which is privately held, purchased not only EMC but its Byzantine federation of wholly and partially owned subsidiaries. Those include cybersecurity firm RSA Security LLC, software-development company Pivotal Software Inc., cloud-software company Virtustream and virtualization software vendor VMware, which will remain public.
Though Dell is privately held, because the deal gives EMC shareholders a tracking stock for VMware shares, the company has already begun to file quarterly reports with the SEC.
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