EMC/Dell deal Competition authorities at the European Commission will either rubber-stamp Dell’s proposed $67bn slurp of EMC by the end of next month or launch a full-blown probe.
The largest buy in tech history is expected to close between May and October, according to the companies - but this is assuming anti-trust regulators approve it and financials of the deal don’t unravel.
Texan tech titan Dell yesterday asked for approval, a filing in the labyrinthine web pages of the EC confirmed. The provisional deadline for the case is 29 February.
To buy EMC, privately owned Dell may need to take on circa $40bn worth of debt and has in recent months started to consider parts of its business that could be hived off.
Perot Systems is attracting some interest - it is believed to be in negotiations with Atos and others - but Dell may also look to offload SonicWall, Quest Software and Rapid Recovery.
Under the terms of the deal, EMC shareholders will get $33.15 per share - traded at $28.35 prior to the public confirmation of the tie-up. They are now trading at $24, giving EMC a market cap of $46.49bn.
As we’ve previously pointed out, EMC investors will get $24.05 in cash and a VMware tracking stock which is linked to EMC’s 80 per cent stake in the virtualisation kingpin. Tracking share are supposed to be worth a little over $9 per EMC share. They are not.
Dell has to raise $40bn to finance the acquisition, and needs to convince investors to - as it stands - to pay over the odds for EMC or ask EMC shareholders to accept a lower offer. Neither seem palatable options for the money men or stock market gamblers.
This bridge can only be crossed if the EC decides in its preliminary review to approve the sale in its entirety or some conditions. Of course it also possible that serious competition concerns could lead to an investigation that would take five months to close. ®