EU approves proposed mega-merger between Dell and EMC
March 01, 2016
The largest tech takeover in history is drawing closer to completion, as Dell and EMC (NYSE: EMC) have received clearance from the European Commission, the antitrust arm of the European Union, to move forward with their agreed-upon merger. Dell is backed by Silver Lake, the firm that partnered with founder Michael Dell to conduct a public-to-private buyout of the computer technology behemoth in 2013.
The deal’s value was pegged at $67 billion when first announced in October, but that number has reportedly declined to $58 billion due to a drop of nearly 40% in the stock price of VMware (NYSE: VMW), an EMC subsidiary that provides cloud and visualization software. With the acquisition of EMC and VMware, Dell aims to continue moving away from its personal computing past and expand into high-growth sectors such as storage and security.
While the transaction still has other hurdles to clear, including a vote by EMC shareholders this spring and examination by various regulatory bodies, gaining approval from the EC is seen as a major step. The body has recently been skeptical of other giant tech corporations; for instance, it issued a non-binding resolution in 2014 advocating that Google separate its search business from its other commercial properties. Regulators in the U.S. gave the Dell deal their stamp of approval earlier in February. Assuming no setbacks, the transaction is expected to close by October.