Dell Plans Spinoff for VMware Stake
By Micah Maidenberg
Dell Technologies Inc. said Wednesday it would spin off its 81%
stake in cloud-software giant VMware Inc., a deal it said would
strengthen its financial position as it looks at new markets and
reach more customers revamping their digital strategies.
Dell said that VMware will pay a special cash dividend tied to
the spinoff of $11.5 billion to $12 billion to the firm's
shareholders, including $9.3 billion to $9.7 billion for Dell
itself. The company said it intends to use net cash from the
dividend to pay down debt.
Shareholders in Dell will receive roughly .44 shares of VMware
for each share of Dell they own.
Dell last year initiated a process to examine its stake in
VMware that included unloading its ownership interest, buying the
rest of the firm or other options, The Wall Street Journal reported
Shares of Dell gained 8.7% in after-hours trading. VMware's
stock ticked down slightly, according to FactSet.
The spinoff is expected to be completed in the fourth
"With an even stronger capital structure, Dell Technologies is
poised to further capitalize on the rebound in infrastructure and
PC spend, new cloud operating models driving as-a-Service growth,
compute moving to the edge, and customers' longer-term digital
transformation initiatives," Dell said in a statement on
Write to Micah Maidenberg at email@example.com
(END) Dow Jones Newswires
April 14, 2021 16:50 ET (20:50 GMT)
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