Dell's acquisition of EMC would mark the largest deal in IT industry history. Michael Dell and other company executives have said that bringing in EMC and its various companies—including VMware, RSA, Pivotal and VirtuStream—will significantly bolster Dell's capabilities in such areas as data storage and virtualization. It also will present integration challenges and will hang a debt of more than $50 billion on Dell.
In the SEC filing, Dell and EMC officials said that the combined company in the first 18 to 24 months after the deal closes will focus on paring down that debt, reiterating that the company will do so by selling off some of its non-core assets, though they did not outline which assets will go. Dell reportedly already is looking to sell some of its assets before the deal is complete, including its SonicWall, Quest and Perot Systems services units.
However, they also reiterated that the merged company would not use VMware's money or debt capacity to help pay off the larger debt, and that VMware will not be liable for any of that debt. The share prices of both EMC and VMware have fallen since the deal was announced in October 2015, and among shareholder worries was that Dell would lean on VMware once the deal closed to help pay the debt. Dell officials have promised that won't happen, and they reiterated that in the SEC filing.
Dell and EMC officials still expect the deal to close sometime between May and October, which would put it about two years after Michael Dell first contacted EMC CEO Joe Tucci about the idea.