Dell Reportedly Considers Reverse Merger with VMware
According to several news reports, it appears there might be a reverse merger of Dell and VMware, giving Dell the opportunity to pay down its debt, as well as re-join the markets without a formal listing. Should it go through, it could potentially be the biggest deal in tech-industry history.
As early as last week, Bloomberg reported that Dell was looking at several options to raise funds, including buying out the rest of VMware or even taking its Pivotal Software business public. But as CNBC reported today, "Dell is unlikely to sell the company outright or sell its stake in VMware, one of the people [familiar with the matter] said."
Back in 2015 Dell acquired EMC for $67 billion, giving Dell an 80 percent stake in VMware, which at the time was the largest technology deal ever. The reverse merger would top that and, according to CNBC, "VMware would issue shares to Michael Dell and Silver Lake, the private owners of Dell. The owners could then sell shares on the public market as a way of monetizing their investment in Dell, the people said."
The Dell board is reportedly meeting later this month to discuss the different options.
Wendy Hernandez is group managing editor for the 1105 Enterprise Computing Group.