Dell Purchase of EMC Gets Final Approval

The deal will close on Sept. 7

• By Keith Ward
• 08/30/2016

EMC Corp. and its subsidiaries, including the "crown jewel," VMware, will come under the wing of Dell Inc. on Sept. 7, more than 11 months after the monster deal was announced.

The new combined company will be called Dell Technologies. According to a release by Business Wire,  "Today’s announcement follows regulatory approval of the Dell and EMC transaction by China’s Ministry of Commerce (MOFCOM), which has granted clearance for the companies’ proposed combination." Dell CEO Michael Dell, during a Monday press briefing at VMworld 2016, said that getting Chinese government approval of the deal was the final step, and was nearly complete.

Clearing all the regulatory hurdles been a slow process. Last Oct. 12, Dell announced the deal to buy EMC Corp. for $67 billion, in the biggest IT merger ever. Dell, which was privatized by founder and CEO Michael Dell in 2013, will take control of EMC and the various businesses in its "federation," which includes Pivotal; RSA; Virtustream; and VCE, in addition to VMware. In a complex bit of financial maneuvering, VMware will continue to be a publicly traded company while still being owned by Dell.

In a Virtualization Review article describing some of the potential fallout of the Dell purchase for VMware, Al Gillen, group vice president of Enterprise Infrastructure for IDC, said that the virtualization leader is likely to retain its famous independence from its parent.

"VMware is relatively insulated from the larger EMC business, and I didn't see then and I don't see now that VMware's business is directly affected by this acquisition, if and when it completes."

The transaction itself, Gillen said, could be a factor in Dell staying mostly out of VMware operations. "There's only so much you can do at one time, and it's going to be a pretty massive integration effort as it is, so mixing VMware into that whole integration and digestion process would be adding a whole lot of complexity that they don't need to have right now."

That complexity now kicks off Sept. 7. In the Business Wire release, Michael Dell explained what the merger means for the new combined company. "This is 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."

Since the acquisition was announced, VMware has gone through a tumultuous time. It laid off about 800 employees in the first half of 2016, moving into higher-growth areas, the company said at the time. Following in the wake of the layoffs was a series of high-visibility departures by top VMware executives, including (with their titles at the time of the annoucement): President and COO Carl Eschenbach; CFO Jonathan Chadwick (who, ironically, announced the initial round of layoffs); Martin Casado, head of the NSX business unit; and vCloud Air chief Bill Fathers.