Go Back   Team-BHP > Around the Corner > Shifting gears > Gadgets, Computers & Software


Reply
 
Thread Tools Search this Thread
Old 12th October 2015, 18:51   #1
BHPian
 
2500cc's Avatar
 
Join Date: Feb 2010
Location: Bangalore
Posts: 660
Thanked: 228 Times
Default Biggest Tech Acquisition in history - Dell to acquire EMC

In the biggest ever tech acquisitions, Dell has proposed to take over EMC for whopping $67 Billion ($33/share = $24.02/ share of EMC + $9 / VMWare share).
http://economictimes.indiatimes.com/...w/49323605.cms
2500cc is offline   Reply With Quote
Old 12th October 2015, 19:06   #2
BHPian
 
aqualeo2040's Avatar
 
Join Date: Apr 2009
Location: Back 2 Bangy
Posts: 407
Thanked: 230 Times
Default re: Biggest Tech Acquisition in history - Dell to acquire EMC

Dell has a market Cap of $24bn and EMC is around $28.6Bn.

Can someone explain the Hows?
aqualeo2040 is offline   Reply With Quote
Old 12th October 2015, 19:13   #3
Team-BHP Support
 
Samurai's Avatar
 
Join Date: Jan 2005
Location: B'lore-Manipal
Posts: 22,042
Thanked: 13,488 Times
Default re: Biggest Tech Acquisition in history - Dell to acquire EMC

Quote:
Originally Posted by aqualeo2040 View Post
Dell has a market Cap of $24bn and EMC is around $28.6Bn.
Where did you get the market cap of Dell? It is a private company, you can't know what they are worth unless you look into their balance sheet.
Samurai is offline   Reply With Quote
Old 12th October 2015, 19:15   #4
BHPian
 
aqualeo2040's Avatar
 
Join Date: Apr 2009
Location: Back 2 Bangy
Posts: 407
Thanked: 230 Times
Default re: Biggest Tech Acquisition in history - Dell to acquire EMC

Quote:
Originally Posted by Samurai View Post
Where did you get the market cap of Dell? It is a private company, you can't know what they are worth unless you look into their balance sheet.
Hi,
Got it from here .

Also, why is Dell paying $62Bn for a $28.5Bn org?
aqualeo2040 is offline   Reply With Quote
Old 12th October 2015, 19:21   #5
adu
BHPian
 
Join Date: Mar 2010
Location: Bangalore
Posts: 91
Thanked: 49 Times
Default re: Biggest Tech Acquisition in history - Dell to acquire EMC

Quote:
Originally Posted by aqualeo2040 View Post
Hi,
Got it from here .

Also, why is Dell paying $62Bn for a $28.5Bn org?
Because of the valuation that VMware commands. EMC has 82% stake in VMware and it is valued at close to $31 Billion today.
adu is offline   Reply With Quote
Old 12th October 2015, 19:26   #6
Team-BHP Support
 
Samurai's Avatar
 
Join Date: Jan 2005
Location: B'lore-Manipal
Posts: 22,042
Thanked: 13,488 Times
Default re: Biggest Tech Acquisition in history - Dell to acquire EMC

Quote:
Originally Posted by aqualeo2040 View Post
Hi,
Got it from here .
That is old news, just before DELL went private.

Man, this Silver Lake Partners is one monster of a private company. It already owns Avaya and DELL, and they will buy EMC and will mostly own VMWare too.

Just because it is not publicly traded, it flies under the radar. These guys will soon rival Apple/Microsoft/Google as tech giants.
Samurai is offline   Reply With Quote
Old 12th October 2015, 19:30   #7
BHPian
 
Join Date: Jun 2010
Location: Kolkata
Posts: 51
Thanked: 47 Times
Default re: Biggest Tech Acquisition in history - Dell to acquire EMC

Both companies had compulsions to do some major re-structuring.

Dell is the world's No 3 PC maker, but sales of PCs have been falling because people are using hand held devices more and more. Dell needed to strengthen its business in servers (which gets business from large corporates) and hence needed to improve its strength in data storage and handling.

EMC has been looking around for suitors. Its CEO wants to retire, and his departure has been postponed for lack of a suitable successor. Its principal shareholder was also putting pressure to encash value.

Together, the two companies hope to dominate in the data storage and handling space.

Dell has debit of $ 12 Bn. It needs $40 Bn to pay for the cash component of the deal. This will come from equity injection by Dell's shareholders, as well as more debt. Details do not seem to be available, since Dell is now a private company.

This is a big gamble for Dell. Will it earn enough from the new strengths that EMC brings to the table, or will it shareholders suffer erosion of their equity value? There is the servicing of all the debt, too. Fortunately, interest rates are still low.

For EMC's shareholders it is more like "get out while the going is good". Admittedly, it might get a better price later, but its previous plans to sell have not come through. Hence it seems to be a good deal for EMC.

This reminds me of the take-over of ABN AMRO Bank by the Royal Bank of Scotland just before the economic crisis in 2007. RBS fended off other suitors by repeatedly raising its bid, expecting to be a dominant player with the help of ABN AMRO's international business. Unfortunately, the bottom fell out of the banking business, and RBS went bankrupt, having to be bailed out by the UK Government. ABN AMRO shareholders, on the other hand, laughed all the way to the bank, having got a super price just before everything collapsed.

Will the Dell/EMC deal go the same way?
benu9714 is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Microsoft to acquire Nokia’s devices & services business, patents and maps myavu Shifting gears 92 22nd July 2015 13:37
Volkswagen to acquire 90.1% of Italdesign Giugiaro ac 427 The International Automotive Scene 6 26th May 2010 15:18
Porsche to acquire VW? -Now merging androdev The International Automotive Scene 66 10th December 2009 19:23
India may acquire it's 2nd F1 team. khanak Int'l Motorsport 24 14th February 2008 18:34


All times are GMT +5.5. The time now is 00:32.

Copyright ©2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks