It's been a rough couple of years for Dell, but the Texan PC behemoth ain't going down without a fight.
Dell Inc. agreed to buy EMC Corp. for about $67 billion in the largest technology acquisition ever as Michael Dell looks to leverage EMC’s dominance in storage devices amid intensifying competition.
That's - literally - a very big deal. And so is the debt situation making it all happen.
The computer maker plans to pay $24.05 a share in cash plus tracking stock in EMC’s prize holding, software maker VMware Inc., valued at about $9 for each EMC share. EMC’s stock climbed 1.8 percent Monday to $28.35. Dell will add almost $50 billion to its debt load to complete the purchase, people familiar with the matter said, on top of the $11 billion it already is carrying.
With EMC, Dell becomes a big data firm of unprecedented size and power. But while that sounded pretty dope in the 90's, the contemporary tech scene is pretty rife with small, nimble tech startups that are creating data and fintech solutions without cumbersome stuff like $50 billion debt obligations weighing them down.
And in addition to tiny extremely-promising startups, Dell is also putting itself directly in competition with Amazon's huge move into cloud computing and big data products. Amazon is an opponent that can match Dell/EMC in size while also deploying its now-patented "we will lose so much money just to crush you" philosophy of corporate warfare.
But a huge M&A deal makes everyone a little drunk with excitement, so let's not harp on what Dell did wrong in this, let's just delay thinking about what else they'll have to do or buy to avoid having made a tragic, $67 billion, mistake.
Dell to Buy EMC in Deal Worth About $67 Billion [Bloomberg]