Dell plans VMware acquisition or IPO

In a reverse merger, Dell would let take over from VMware, as emerges from a compulsory release to the US Securities and Exchange Commission SEC.

Dell has confirmed reports that the company is reviewing strategic options to raise additional funds. In a Börsenpflichtmeldung the PC manufacturer calls two alternatives: the return to the stock exchange and an affiliation with the daughter VMware.

Dell was listed as an unlisted company because it holds around 82 percent of VMware's stock - a listed company. As a result, Dell now had to disclose the plans to the Securities and Exchange Commission. Dell emphasized that it would normally keep such considerations secret "until certain steps have been taken".

A merger with VMware would not be a takeover by Dell, but a so-called reverse merger. As a result, Dell would not buy the remaining approximately 20 percent of VMware, but VMware would acquire the majority of Dell shares not currently traded on the stock exchange. This option is subject to a blocking clause that prohibits Dell from acquiring VMware until September 2018.

VMware commented on Friday in a press release also to the stock market obligation message from Dell. "We are not in a position to speculate on the outcome of Dell's reflections on possible strategic options," said VMware CEO Pat Gelsinger. "Dell has been an incredible partner since it became our majority shareholder as we accelerated our growth. We look forward to Dell's continued support as we implement our growth plans over the coming years. "

At the end of last week's US media reports, company founder Michael Dell was under pressure to increase the profitability of his company. The $ 68 billion acquisition of EMC in 2016 failed to deliver either the anticipated cost reductions or the anticipated growth. In addition, rising production costs eroded margins.

Other alternatives mentioned in the reports included a sale or an IPO of the software division Pivotal. The funds from an IPO could use Dell to reduce its debt mountain. The computer manufacturer is to stand with its creditors with 46 billion dollar in the chalk.