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Dell plans to divest 80% of VMware to raise funds for debt repayment

Use wechat scan QR code < / P > < p > to share with friends and circle of friends < / P > < p > < / P > < p > April 15 news, US local time Wednesday, < a target = "_ blank" href=" https://news.163.com/news/search?keyword=%E6%88%B4%E5%B0%94 "> Dell < / a > technology announced that it will divest its cloud computing software developer < a target ="_ blank" href=" https://news.163.com/news/search?keyword=VMware "> VMware < / a > 81% of the shares, the establishment of two independent listed companies. This will help Dell raise more < a target = "_ blank" href=" https://news.163.com/news/search?keyword=%E7%8E%B0%E9%87%91 "> cash < / a >, to reduce the debt burden. After the news, Dell shares rose more than 8% in after hours trading. < / P > < p > Dell said in a statement that VMware would pay shareholders a special cash dividend of $11.5 billion to $12 billion at the end of the transaction, and Dell, which owns 81% of VMware, would receive a dividend of up to $9.7 billion. The deal is expected to close in the fourth quarter. < / P > < p > Michael Dell, chairman and CEO of Dell, said: "we expect to bring more growth opportunities to Dell and VMware and release great value to shareholders. The two companies will remain important partners. " < / P > < p > Dell is slowing down its massive acquisition, which has led to a heavy debt burden. The divestiture of VMware will provide Dell with more cash to fulfill its promise to investors to reduce its debt. Dell's current debt is $48.5 billion, of which "core debt" is $29.2 billion. < / P > < p > VMware was founded in 1998 and was approved by < a target = "in 2004_ blank" href=" https://news.163.com/news/search?keyword=EMC "> EMC < / a > acquisition, EMC sold part of VMware's shares in its initial public offering three years later. In 2016, Dell acquired EMC with us $67 billion, which is the largest successful acquisition in the technology industry. At that time, EMC also transferred its VMware shares to Dell. < / P > < p > Dell said in July last year that it was studying the divestiture of its VMware shares, but for tax reasons, the deal would not be carried out until after September 2021. < / P > < p > VMware said in a statement that based on the outstanding shares as of March 16, 2021, the estimated value of cash dividends that VMware will provide to shareholders ranges from $27.43 to $28.62 per share. < / P > < p > Zane Rowe, interim chief executive of VMware, said that VMware would take $2.5bn to $3bn in cash from its balance sheet to pay dividends and the rest would be paid through debt. He also said VMware is expected to receive an investment grade credit rating after the deal is completed. < / P > < p > the two companies said the deal would simplify their capital structure. The two sides will also reach a commercial agreement to continue to coordinate sales activities and jointly develop solutions. It also allows VMware to build more partnerships with major cloud computing vendors, one of Dell's main technology competitors. < / P > < p > Dell shares rose more than 8% in after hours trading after closing at $92.7 in New York. The stock is up 26% this year. (small) < / P > < p >


2023-03-22 10:04:32

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