Dell said it was considering divesting its majority stake in VMware,media reported. The deal could generate billions of dollars in revenue, but it would separate the hardware giant from its fastest-growing business unit. Dell, which is based in Pebble, Texas, said in a statement Wednesday that the spin-off “could benefit both Dell and VMware shareholders.” The company said the deal would not be completed until September 2021 at the earliest.
Infographic (from: VMware)
Michael Dell, the company’s chief executive, orchestrated the largest technology acquisition in 2016, buying storage company EMC corp. for $67 billion. The deal gives Dell ownership of VMware, but it also has a heavy debt burden.
In the years following the deal with EMC, VMware’s strong profitability did not directly help Dell’s debt repayments. In May, Dell announced that it had repaid $5.4 billion in debt in the first quarter, but still had $48.4 billion in long-term debt.