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Dell May Sell Itself to VMware in a Reverse Merger: Report

Dell May Sell Itself to VMware in a Reverse Merger: Report

By Chaitnaya Kamboj | Updated: 31 January 2018 12:55 IST

Highlights

Dell owns 80 percent of VMware
Move will help the company to go public without new stock offering
Dell is considering other deals as well

Dell may be set to enter a new era in its history soon, after completing a run of more than 4 years as a private company. Dell is reportedly exploring a 'reverse merger' deal with VMware, where the latter will buy its parent company, helping the former go public without having to launch a new stock offering. The reported deal, not yet finalised, will also help Dell pay back some of its $50 billion (roughly Rs. 3.18 lakh crores) debt.

CNBC in a report on Monday claimed Dell is exploring a reverse merger deal with VMware - a company that it owns 80 percent of following its EMC acquisition - citing people familiar with the matter. The report, however, added that it is not the only option on the table for Dell. The people it cited claim there several alternatives open to the PC maker, including a straightforward public offering, other takeovers (no target named), or buying the remaining 20 percent stake of VMware. Dell is unlikely to sell the company outright, or sell its stake in VMware, one of the people cited said. CNBC added that both Dell and VMware declined to comment on the report.

Previously, Dell went private when it wanted to restructure without any pressure of publicly traded stock after struggling for some time. The company posted a loss of $941 million (roughly Rs. 6,000 crores) in its latest quarter, thanks to paying off $1.7 billion (roughly Rs. 10,800 crores) in debt. While going for a reverse merger would seem an intrepid move for Dell, it will clearly showcase how things have changed for Dell over a gap of a few years.

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