Dell Announces Purchase of EMC for $67 Billion

12 Oct 2015 | Author: | No comments yet »

Data Sheet—Monday, October 12, 2015.

San Francisco: Dell agreed to buy EMC Corp for about $67 billion (Dh246.1 billion) in the largest technology acquisition ever, creating a corporate-computing giant that will use a wider product line-up to woo customers as demand slows and competition stiffens.

Dell has agreed to purchase Boston-area data storage company EMC for $67 billion, making it the largest tech acquisition ever, The Boston Globe reports.A giant dinosaur – as long as a double decker bus – that lived about 72 million years ago had a brain just 6.3cm big, say UK scientists who have described one of the most complete sauropod dinosaur braincases ever found in Europe.

Dell plans to pay $24.05 a share in cash plus tracking stock in EMC’s prize holding, VMware Inc, valued at about $9 for each EMC share, the companies said in a statement Monday. The deal will be the largest ever in the history of the tech industry, reports The Financial Times, with EMC agreeing to a sale price worth roughly $33.15 a share. “We’re continuing to evolve the company into the most relevant areas where IT is moving,” Dell’s founder and chief executive Michael Dell told The New York Times. “This deal just accelerates that.” The nature of the planned takeover is complicated, with the agreement reportedly including a “go-shop” provision that allows EMC to consider bids from rival firms. Researchers have digitally reconstructed the cavity where the brain lay, the passages of the cranial nerves and certain blood vessels as well as the labyrinth of the inner ear. While the agreement has a provision that lets EMC talk to other potential bidders, the company doesn’t expect any, a person familiar with the matter said. The company is reportedly under pressure from an activist investor, hedge fund Elliott Management, with the Times noting that a potential deal between EMC and Hewlett-Packard already fell apart prior to this.

Along the way, long-time EMC CEO Joe Tucci will finally get a chance to retire after months of trying to appease activist investor Elliott Management. The skull, from a titanosaur, a type of sauropod, was found at a dig site in eastern Spain in 2007 and experts have spent the last few years studying it, ‘mirror.co.uk’ reported. “This is such a rare finding that is why it is so exciting.

The deal would combine EMC’s dominance in devices that store data with Dell’s No 2 position in servers, the powerful machines that help companies handle big computing challenges. Usually we find vertebrae or other bones, very rarely the braincase and this one is complete,” Knoll said. “Currently we know very little about the brain of dinosaurs.

EMC shareholders will receive new tracking stock as part of the transaction. (EMC owns approximately 80% of VMware.) In announcing the deal, the companies suggested that the turmoil of the industry’s transition to cloud computing, mobility, and digital business are tough to navigate in the public markets. Research such as this is fundamental if we want to get an idea about the cognitive skills of these animals or if they had keen hearing or good eyesight and plenty of other information,” Knoll said. It’s difficult not to interpret this statement in their joint press release as a dig against activist investors focused on quarter-to-quarter results: “Since becoming a private company, Dell has had the flexibility and agility to focus completely on customers and invest for long-term results. … The combined company will consist of strategically aligned businesses and incubated high-growth assess, fostering innovation, enabling customers choice, and attracting and retaining world-class talent.” If things go smoothly, the EMC privatization should be finalized somewhere between May and October 2016. However, the ambitious takeover bucks a trend in the industry, with other firms such as HP and eBay choosing to break up their businesses — rather than make them bigger — to better deal with a changing market.

Knoll, who made the first digital reconstruction of a dinosaur endocranial cavity in the late 1990s, said: “In a few years’ time if more finds like this come to light and, above all, if they are studied with the modern imaging technologies then we could really start to understand more about dinosaur brains.” While the company has been focusing on newer products such as flash arrays that speed up data retrieval, where it’s growing more rapidly, that hasn’t been enough to lift sales growth.

The White House still thinks the industry should play a bigger role in aiding national security investigations. (New York Times) Cyber-insurance crackdown. EMC’s revenue is projected to increase about 3 per cent this year, its slowest rate since logging a decline in 2009, according to data compiled by Bloomberg.

Not only are premiums on the rise—an average of 32% for retailers—some of the largest firms are limiting their policies to $100 million in coverage. Several reports, citing sources close to the plan, suggest belt-tightening measures will include layoffs and a halt to its headquarters expansion in San Francisco. (NYTimes, Re/code) DocuSign hires CEO recruiter. During the third quarter, overall shipments declined 7.7 per cent, according to Gartner Inc Still, Dell was able to post a small gain of 0.5 per cent while larger rivals declined.

A growing number of large and influential companies are ditching their old and much-hated annual reviews and employee engagement surveys and are replacing them with a more flexible, “rolling” system. The new surveys would be shorter and much more targeted than the hellish behemoth of yesteryear, while being optimized for smartphones, a medium more attuned to the lifestyle of today’s young and mobile workforce.

Though Dell and EMC have done business together for years and have complementary cultures, the sheer size of a combined entity could slow decision-making and hamper speedy product-development. What’s more, EMC bonds came under pressure last week on concern that the purchase would undermine current bondholders’ place in the capital structure.

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