Deal valued at $60 billion
The EMC Corp. (EMC) and Dell acquisition deal is currently valued at $60 billion. This is $7 billion lower than what the deal was actually worth.
EMC’s CEO, Joe Tucci, stated, “We expect the transaction to happen on the original terms and within the originally announced timeframe. Integration planning has accelerated…, the leadership team has been established and we’ve received the vast majority of antitrust approvals required.”
This acquisition is expected to take place when the macroeconomic conditions for technological companies have been volatile. Intel (INTC) recently announced that it would lay off 12,000 employees, or 11% of its workforce. Last week, IBM (IBM) also reported a 16th straight quarterly decline in revenues.
In 2015, Hewlett-Packard (HPQ) spun off its Printer and Personal Computer businesses, which is exactly the opposite of what Dell has done by consolidating its diverse IT products and services.
VMware plans to buy back $1.2 billion in shares after shareholder vote
According to analysts, VMware (VMW) gave the shareholders of its parent company, EMC Corp., more incentive to approve the takeover by Dell. On April 19, 2016, VMware’s stock rose by 9% after it reported solid 1Q16 results and stated that it will repurchase $1.2 billion in stock.
This repurchase is expected to take place after EMC shareholders vote on the Dell acquisition in June 2016. The buyback will reduce the number of shares outstanding for sale, thereby increasing their market value.
EMC accounts for 3.9% of the First Trust ISE Cloud Computing Index ETF (SKYY).