Dell to buy storage rival EMC in a deal worth $67 billion

(credit: Aurich Lawson)

Last week's rumor is this week's news. Dell is buying storage company EMC for about $67 billion. The combined company will be led by Michael Dell, founder, chairman, and CEO of Dell.

EMC shareholders will receive about $33.15 per share, a premium of about 28 percent over the closing price on October 7 before the rumors came out. This will be made up of a mix of stock and cash: $24.05 per share in cash, and the remainder in tracking stock. This tracking stock is tied to the value of EMC's 80 percent holding in VMware.

Financing for the deal will be a mix of equity from Michael Dell, his investment vehicle MSD Partners, investment firm Silver Lake, and Singapore state-owned investment company Temasek Holdings, along with debt financing, cash on hand, and the VMware tracking stock. Silver Lake helped finance Michael Dell's takeover of his namesake company in 2013 which took it back into private ownership.

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