Dell announced Monday it is set to purchase IT services giant EMC for $67 billion in the largest tech deal in history. The deal will transform Dell into an IT solutions provider, the company said.
Michael Dell’s goal is to build an integrated IT giant that will run directly against HP, Hewlett Packard and IBM. This change will allow Dell to have a more influential presence in the IT market and create a prominent role in the small and mid-sized business marketplace.
In a statement Monday morning, Dell explained, “The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment. Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security.”
Michael Dell will be leading the merged company, but its headquarters will remain in separate locations; Dell’s in Round Rock, Texas, ad EMC’s in Hopkington, Mass.
The $40 billion debt that is created from this deal will influence Dell to cut off some smaller business lines. An analyst at FBR Capital Markets believes the company may sell off EMC’s RSA security unit and its Pivotal joint venture, according to Forbes.
“I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders,” CEO and EMC chairman Joe Tucci said.