Round Rock-Based Dell Inc. Completes Merger With EMC Corp, Yielding World's Largest Privately Held Tech Firm

ROUND ROCK, TX -- Advancing the notion that everything in Texas is bigger, Round Rock-based Dell Inc. on Wednesday announced the completion of its $60 billion purchase of EMC Corp. -- making the deal the largest technology merger in history.

The new company will be named Dell Technologies, wit a goal of becoming a one-stop shop for information technology sold to business, as the Wall Street Journal explained. The combined behemoth employs some 140,000 people worldwide and will maintain its operations in Hopkinton, Mass., where EMC is located.

Combined, the two companies merged together as Dell Technologies boast $74 billion in revenue. Post-merger, it is now the world's largest privately controlled tech company.

"Let the Transformation Begin," reads a message on the Dell Technologies website -- a slickly produced portal featuring an hour-long video suffused with dramatic musical score, the opening images of people serving as metaphors representing both companies.

“With the supply chain that we have and the go-to-market strength and the scale, we feel very well positioned both in the new areas of technology and in the existing areas of technology today,” Dell Technologies CEO Michael Dell told the Wall Street Journal.

In the interview, Dell cited the shifting industry landscape for prompting the mega-merger. He told the WSJ he expects consolidation in the market for conventional servers and storage hardware as the corporate computing market adapts to newer technologies and cloud services.

"We know how to win in consolidation," he told the newspaper confidently. "We've proven that, and we're going to prove again."

Even while accustomed to writing about complicated business transactions, mergers and acquisitions, the WSJ labeled the deal that begat Dell Technologies as "extraordinarily complex." It took nearly 11 months to complete, required the raising of $40 billion in debt and the need to raise more than $5 billion through agreements to sell its IT-services business and software divisions. the newspaper reported.

Adding to the complexity: "Dell, which is privately held, purchased not only EMC but its Byzantine federation of wholly and partially owned subsidiaries. Those include cybersecurity firm RSA Security LLC, software-development company Pivotal Software Inc., cloud-software company Virtustream and virtualization software vendor VMware, which will remain public."

Other than winning through consolidation, as Dell posited, the merger also is something of a response to overall declining markets in both companies' core businesses. Those shifting markets Dell presages already have made an impact on both firms' bottom lines.

"The merger between Dell and EMC is a response to overall declining markets in both Dell’s and EMC’s core businesses as technology shifts to mobile devices and toward lower-margin hardware such as servers and storage used in cloud computing," the WSJ explained.

Round Rock-based Dell on Tuesday reported revenue for the three-month period ending July 29 grew to $13.05 billion from $12.98 billion the year before. The company closed the gap on losses from continuing operations to $264 million, compared with a $292 million loss from continuing operations in the comparable period a year earlier.

Read the full story at Wall Street Journal >>

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