Dell has finally confirmed long-running speculation that it will sell off its majority stake in VMware.
The tech giant inherited VMware through its gargantuan acquisition of EMC for $67bn in 2015 and rumours emerged last summer that it was mulling over a divestiture of the virtualisation vendor.
The transaction will see Dell offer VMware’s shareholders a special dividend of between $11.5bn and $12bn at the close of the transaction, which is expected in Q4 of 2021. This would result in a payout of over $9bn for Dell, which it intends to use to pay down debt.
"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 CEO of 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 modernise its core infrastructure and PC businesses and embrace new opportunities through an open ecosystem to grow in hybrid and private cloud, edge and telecom."
