Dell Technologies will spin off its 81% equity ownership of VMware, forming two standalone entities, according to the company’s press release. VMware will be required to distribute a special cash dividend of $11.5-$12 billion to all its shareholders, including Dell Technologies.
The companies will strengthen their mutually beneficial strategic relationship and continue to co-engineer customer solutions through a commercial agreement.
The transaction is expected to open additional growth opportunities for Dell and unlock significant value to shareholders.
VMware will continue using Dell’s Financial Services to help customers finance their digital transformations.
Dell shareholders will receive about 0.44 shares of VMware for each share of Dell they hold
VMware will shift from a multiclass to a single class share structure while Dell’s share structure will be unchanged.
The transaction is expected to close during the fourth quarter of this year and Michael Dell will remain chairman and CEO of Dell, as well as chairman of VMware board,Dell and VMware stocks are currently gaining. DELL: NYSE is up 8.40% on premarket, VMW: NYSE is up 2.26% on premarket
