VMware’s customers have just received a letter from the company’s CEO Raghu Raghuram, in which he briefly introduced the spin-off of Dell and VMware:“Today marks the beginning of a new era for VMware. With the separation of VMware and Dell technologies, we are once again an independent company.”
Picture fromVMware Blog
In 2015, Dell acquired EMC/VMware for $67 billion, which is still one of the largest transactions in the new technology market to date. On November 2, VMware announced its formal spin-off from Dell Technology Group, giving VMware greater freedom in implementing its multi-cloud strategy while simplifying its capital organization and management model.
The transaction involves Dell’s 81% of VMware’s shares and is achieved through the payment of dividends in the form of VMware shares to Dell shareholders. The statement said that the spin-off will create two independent companies, but it is expected that they will maintain close contact. This transaction is a good time for both companies. With the acceleration of digital transformation and the rebound of infrastructure (including personal computers and servers), cloud computing and edge markets, and the launch of 5G, the prospects for both companies are very optimistic.
After the spin-off, VMware will pay shareholders a special dividend of $11.5 billion. The dividend will be paid to all VMware shareholders on November 1, 2021 (the date of payment) based on the amount of US$27.40 per share as of the close of business on October 29, 2021 (the date of record). The ex-dividend date is November 2, 2021, which is the first trading day after the payment date.
Dell’s statement read: “Dell Technologies and VMware will maintain a strong and unique business arrangement that retains the most valuable elements of the company’s relationship, such as joint development of mission-critical solutions and consistent sales and marketing activities. While allowing strategic flexibility.” VMware will continue to use Dell’s financial services to help customers fund their digital transformation. In the leadership, Michael Dell will continue to serve as the president and CEO of Dell Technologies, and is also the chairman of VMware’s board of directors. VMware’s board of directors will remain unchanged.”