US: VMware may buy Dell in biggest-ever tech deal

Dell Technologies could emerge as a public company through a reverse-merger with VMware, the US$60 billion cloud computing company it already controls, according to CNBC.

VMware, which was absorbed by Dell in its US$67 billion acquisition of EMC, could now turn around and buy Dell, CNBC reported, citing unidentified people familiar with the matter. In a reverse merger, VMware would issue shares to Dell’s private owners, which could then sell the stock on the public market, giving them a way to profit from having taken Dell private in 2013 and to help pay off some of its US$50 billion in debt, CNBC said.

Dell, which owns about 80% of VMware, is considering various options, including a public stock offering, people familiar with the matter told Bloomberg last week. The company’s board is meeting later this month to discuss the options as it seeks ways to boost revenue and raise funds.

Dell Founder and Chief Executive Officer Michael Dell took his company private in 2013, when he teamed up with Silver Lake Management LLC on a leveraged buyout. That freed Dell to cut costs and work to become a bigger supplier of hardware and software for corporate data centers without the quarterly investor scrutiny that comes with being a public company. Three years later, Dell acquired storage-technology provider EMC and its majority stake in data-center software vendor VMware, taking on a massive debt load to seal the deal.

Full Content: CNBC

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