The past week has brought a steady trickle of news related to Round Rock-based Dell Inc.’s pending purchase of storage giant EMC Corp.
Dell’s planned $67 billion deal for EMC, which is based in Hopkinton, Mass., a suburb of Boston, was announced in October. It would be the biggest IT sector buyout ever.
This deal is so big, in fact, that some analysts have questioned whether Dell Inc. has the funds to really pull it off, and EMC's stock price has dropped more than 10 percent since the deal was announced. Meanwhile, Dell Inc. and EMC executives keep reassuring investors, customers and employees that the deal is definitely happening.
But last week the New York Post reported that Dell Inc. was having a hard time finding takers for the loans it needs to take out to pay for the deal, with a JP Morgan-led group of banks needing 10 more days to raise the first $10 billion for the deal.
This week, Reuters and other news outlets reported that the European Union is poised to approve the purchase without asking for concessions. Approval from the EU is one of the remaining hurdles to closing the deal. European antitrust regulators are generally viewed as more concerned about giant corporations gaining unfair competitive advantages than their U.S. counterparts. Official word is expected to come by Feb. 29.
On Tuesday, there were more reassurances from Dell Inc. executives that the deal would go through. Rory Read, Dell Inc.s' chief integration officer, wrote a letter to Dell employees updating them on the EMC purchase. Read wrote that the debt financing was "fully committed" and being underwritten by many leading global banks. Read said they were on track to close the deal in the May to October timeframe and expected a shareholder vote in the spring.
Even so, speculation about a possible sale of Dell Inc.-owned Perot Systems also picked up steam this week. Reuters reported that Japan-based NTT Data Corp. was in negotiations with Dell Inc. to acquire Perot Systems, which provides IT services to hospitals and governments. A sale of Perot Systems could help pay for the EMC deal, and Reuters reports that Dell Inc. wants more than $5 billion for Perot Systems. Dell Inc. has not officially confirmed this, though it is exploring an IPO for its cybersecurity unit SecureWorks.
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