Dell has announced plans to spin off VMware as a standalone company, in a deal expected to bring in $9 billion.
VMware is a leading virtualization company, with its software powering some of the most critical digital infrastructure in the world. Dell originally acquired VMware as part of its EMC acquisition in 2015.
The two companies have agreed to a spin-off for VMware, one that will provide Dell with $9.3 – $9.7 billion.
“By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders,” said Michael Dell, chairman and chief executive officer, Dell Technologies. “Both companies will remain important partners, providing Dell Technologies with a differentiated advantage in how we bring solutions to customers. At the same time, Dell Technologies will continue to modernize its core infrastructure and PC businesses and embrace new opportunities through an open ecosystem to grow in hybrid and private cloud, edge and telecom.”
At the same time, VMware expects the spin-off to open new doors for their business.
“We will have an enhanced ability to extend our ecosystem across all cloud vendors and on-premises infrastructure vendors and a capital structure that will support growth opportunities,” said Zane Rowe, chief financial officer and interim chief executive officer, VMware. “Our strategic partnership with Dell Technologies remains a differentiator for us, and, as we execute on our multi-cloud strategy, we continue to provide customers our solutions and services on any public cloud and any infrastructure.”
Aside from those stated benefits, much of the relationship will remain unchanged, with the two companies continuing to work closely together. In fact, Michael Dell will remain chairman of the VMware board.
The deal is expected to close in the fourth quarter of 2021.