Dell is acquiring EMC in a record-breaking $67 billion deal

Dell has agreed to acquire EMC in a cash-and-shares deal valuing the company at $67 billion, the companies announced Monday. Michael Dell will become chairman and CEO of the merged company. Under the terms of the deal, EMC shareholders will receive cash and shares in a VMware tracking stock. VMware will continue to operate as an independent company under Pat Gelsinger. EMC CEO Joe Tucci, who will step down when the deal closes around the middle of next year, said he expected the company’s Pivotal subsidiary to be floated as a public company in the near term. But Dell plans to take a greater economic interest in VMware, buying back shares in it over time, Gelsinger said in a conference call with analysts on Monday morning. Dell stands to benefit from a number of synergies with EMC, Tucci said: “It’s pretty amazing how many companies Dell is the number one reseller for, and it’s also amazing how many of those technologies our products can substitute for.” “The revenue synergies are three times as big as the cost synergies. That’s what this transaction is all about,” he added. In the case of VMware, those revenue synergies could involve substituting Dell networking products for those of Cisco Systems, VMware’s current networking partner.