Dell is reportedly offering about $US33 a share to acquire EMC Corp, in a deal that would create a computing colossus and help both companies cope with a demand slowdown.
The proposal includes a tracking stock in VMware valued at about $US8 a share that would be issued to EMC shareholders, said a person familiar with the story. A deal may be announced as soon as Monday, the person said.
Dell is speaking to banks about raising at least $US40 billion to finance the purchase, a person with knowledge of the matter has said.
A deal would bring together
the largest storage maker and the No. 2 server company as the industry
undergoes rapid change with the shift to mobile and cloud computing.
Dell,
which was taken private for about $US25 billion in 2013, will use the
combination to expand its product lineup in high-end data storage
equipment as it tries to lure customers away from Hewlett-Packard Co.
and other rivals.
For EMC, the agreement resolves a long overdue leadership succession and a standoff with activist investors.
The current plan would have Michael Dell run the combined entity, a person with knowledge of the matter has said.
EMC
and Dell both need ways to manage a slump in their main businesses,
with EMC weighing strategic options amid pressure from shareholder
Elliott Management Corp.
Though
the combination would be costly and difficult to finance, it would
provide a one-stop shop for EMC's digital storage products with Dell's
servers, which help businesses tackle mammoth computing tasks.
JPMorgan
Chase & Co., Barclays Plc, Bank of America Corp., Credit Suisse
Group AG and Deutsche Bank AG are among the banks that have been
approached about financing the deal, people said.
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