Dell Buys Data Storage Company EMC For $67bn

Computer company Dell has confirmed it has signed an agreement to acquire EMC Corporation (NYSE: EMC - news) , creating the world's largest privately-owned, integrated technology company.

The deal, worth $67bn (£44bn), is the 17th biggest merger and acquisition deal ever based on the nominal value at the time of the agreement.

EMC (Taiwan OTC: 5299.TWO - news) is based in Massachusetts, US, and provides data storage and IT (Other OTC: ITGL - news) security services to other businesses.

VMware (NYSE: VMW - news) , a subsidiary of EMC which provides cloud storage, will also be involved in the deal but will stay an independent, publicly traded company.

The arrangement values EMC stock at about $33.15 (£21.60) per share, which includes the cash value of the share – around $24.05 – plus ongoing trading stock in VMware.

The offer is a 19% premium on the closing valuation of EMC on Friday, which stood at $27.86 (£18.16).

The EMC Board of Directors has approved the merger, and is recommending that company stockholders give their support to the arrangement.

The deal is expected to be finalised between May and October 2016.

"I'm tremendously 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," said Joe Tucci, chairman and chief executive officer of EMC.

"But the waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era.

"I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders."

For Dell, the merger marks an expansion into new markets as a fall in demand for PCs forces the company to look for new revenue streams.

The area of data storage is said to have been identified as a key area of growth.

"The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment," said Dell founder and CEO, Michael Dell.

"Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data centre, converged infrastructure, hybrid cloud, mobile and security."