Shareholders of EMC Corp. today voted overwhelmingly in favor of the company's planned merger with Dell Inc. -- a more than $60 billion transaction that's been described as the biggest tech deal in history. Dell is best known for being one of the leading PC makers, both on the consumer and business side, while EMC is well entrenched in the enterprise IT market, selling data storage, virtualization and cloud computing systems.
According to a preliminary tally, 98 percent of EMC shareholders who voted were in favor of the merger. Final results are set to be filed with the U.S. Securities and Exchange Commission later this week. The shareholders casting votes represented about 74 percent of EMC's outstanding common stock.
As part of the transaction, Dell, which ceased being a publicly traded company in 2013, must compensate EMC shareholders for taking the firm private. The new company formed after the merger will be called Dell Technologies.
Merger To Finalize by Fall
"Today's resoundingly favorable shareholder vote clearly supports our view that combining Dell and EMC will create a powerhouse in the technology industry," EMC chairman and CEO Joe Tucci (pictured above) said in a statement. He added that the merger represents "what we believe is the best outcome for all stakeholders."
The deal is expected to close within the next few months. In addition to requiring EMC shareholder approval, the merger must also win regulatory approval from China. The deal is currently valued at around $62 billion, a drop from the $67 billion valuation that was estimated at the time the deal was announced in October.
Just yesterday, EMC's second quarter financial results showed the company with GAAP earnings of $6 billion, a 16 percent increase over revenues in the same quarter last year. Tucci said the merger with Dell will help EMC become "the world's largest privately-controlled, integrated technology company."
'New Opportunities' for Customers
When they announced the merger in October, the companies said the new organization would be able to stake a leadership position in "extremely attractive high-growth areas" of the information technology market. In addition to strengthening its hold on current markets for servers, storage, PCs and virtualization technologies, the new entity aims to target growing markets for hybrid cloud services, software-defined data center technologies, converged infrastructure and other digital services.
A recent IDC survey of U.S.-based IT decision-makers concluded that "Dell and EMC benefit from a fairly modest portfolio overlap." IDC also found that the combination of Dell's "historic strength in mid market" and EMC's appeal to large enterprises will likely open up new opportunities for customers. The research indicates the merger bodes well for EMC and Dell customer support, IDC analyst Matt Eastwood said today in a tweet.
The IDC report, which surveyed executives from small, midsize and large businesses, found that just 1 percent of respondents viewed the merger as a negative for the merged company. Seventy-two percent said they believed the deal would result in positive overall benefits, while 27 percent indicated the merger would produce "no significant change" for the combined company.