Dell Technologies is set to complete its $63 billion acquisition of EMC next week after Chinese regulators gave their approval for the deal.
The two companies on Sept. 7 will close what is the largest deal in tech industry history, and will create a massive company that Dell officials expect will be able to better compete with other top-tier enterprise IT vendors like IBM and Hewlett Packard Enterprise (HPE) and give it greater capabilities in such fast-growing areas as converged infrastructure and cloud computing.
The announcement of the closing comes after China’s Ministry of Commerce gave their blessing, eliminating the final barrier to the deal, which was first unveiled in October 2015. Antitrust regulators in both the United States and the European Union already had OK’d the deal, and EMC shareholders in July overwhelming approved it.
Dell founder and CEO Michael Dell said the approval was “an historic moment for both Dell and EMC.”
“Combined, we will be exceptionally well-positioned for growth in the most strategic areas of next-generation IT, including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” Dell said in a statement. “Our investments in R&D and innovation, along with our 140,000 team members around the world, will give us unmatched scale, strength and flexibility, deepening our relationships with customers of all sizes.”
In his own statement, EMC Chairman and CEO Joe Tucci was both forward-looking and introspective.
“I am proud of everything we’ve built at EMC—from humble beginnings as a Boston-based startup to a global, world-class technology company with an unyielding dedication to our customers,” Tucci said. “The combination of Dell and EMC creates a new powerhouse in the industry, providing the essential technology for the next era in IT.”
Through the deal, Dell will inherit EMC, the world’s top data storage vendor, and its lineup of federated companies, including virtualization giant VMware, software makers Pivotal and Virtustream, security vendor RSA and the converged infrastructure business that was VCE. There most likely will still be some shaking out to do before the integration of the two companies is complete.
Looking to cut product overlap and to help pare down the $50 billion or so in debt that Dell will incur once the deal closes, the company in March sold its services business to NTT Data for $3.05 billion, and in June sold its software business—including its Quest and SonicWall units—for $2 billion to private equity firms Francisco Partners and Elliott Management.
The company’s client business will retain the Dell brand, and the enterprise hardware business will be headquartered in Hopkinton, Mass.—where EMC is now based—and take the name Dell EMC.
The deal comes as the PC market continues its years-long contraction and trends like increased mobility, the proliferation of mobile devices, the internet of things (IoT), virtualization, cloud computing, data analytics, virtual reality and augmented reality, software-defined data centers, and artificial intelligence continue to roil the tech industry. Established vendors from Dell and HPE to Cisco Systems, IBM, EMC and Intel are quickly building out their portfolios to meet the changing demands.
Dell, with the EMC acquisition is taking a different tack than HPE by looking to increase its size and industry reach. Not only will Dell be stronger in such traditional markets as storage and security, but also will have the tools to offer solutions that touch every part of the enterprise IT chain, from the data center and client to the cloud and out to the edge, officials have said. Michael Dell has also said that hybrid clouds—which include both public clouds like Amazon Web Services and on-premises private clouds—will be how most IT infrastructure is used, and that the EMC deal will give his company a complete lineup of products to power those clouds.
HPE CEO Meg Whitman went in another direction, splitting Hewlett-Packard in two in November 2015 to create two new companies, HPE, which sells enterprise IT solutions and services, and HP Inc., which sells PCs and printers.