VMware CEO Says Dell's Acquisition of EMC Will Have Positive Impact
In recent TV interviews, CEO Pat Gelsinger says having Dell as the primary shareholder will help accelerate growth for the virtualization company.From the time Dell executives announced in October 2015 the company's $67 billion bid to buy storage vendor EMC, a lot of attention was paid to how the deal would impact the future of VMware, the key company in EMC's federated business model. There was worry that Dell would throttle VMware's independence or raid its cash reserves to help pay down its post-acquisition debt, which could amount to as much as $50 billion. Such worries helped drive down VMware's stock price in the weeks following the announcement, and that was followed by reports in May that VMware CEO Pat Gelsinger was planning to leave the company once the deal went through. Executives with all three companies—including Gelsinger himself—quickly denied the reports. In recent weeks, Gelsinger has been vocal about the Dell-EMC deal, which he said will have a positive impact on VMware and should not significantly change its trajectory going forward. In interviews this week with CNBC and Bloomberg TV, Gelsinger pointed out that Dell CEO Michael Dell has repeatedly said his intention is to grow VMware's business. "As I've described it, I've changed an 'E' for a 'D,'" he told CNBC. "I had a majority shareholder named EMC. [Now] I have a new majority shareholder named Dell, who's committed to continue to accelerate our growth but maintain our independence and ecosystem."
EMC owns about 80 percent of VMware, which is a publicly traded company. Dell went private in 2013 after Michael Dell and Silver Lake Partners bought it for $25 billion. Once the deal is completed, VMware—a $7 billion company with more than 9,000 employees and more than 250,000 customers—will continue to be a public company, with Dell parent company Denali Holdings being the primary shareholder.