Dell Technologies April 14 announced the planned spin-off of its 81% equity ownership interest in Vmware, as it was informed by Dell.
The transaction will result in two standalone companies. Dell Technologies and VMware will enter into a commercial agreement to support the co-development of critical solutions and alignment on sales and marketing activities. VMware will continue to use Dell Financial Services to help its customers finance their digital transformations.
Both parties determined that this transaction will simplify capital structures and create additional long-term enterprise value. At the transaction closing, VMware will distribute a special cash dividend of $11.5 - $12 billion to all VMware shareholders, including Dell Technologies. Based on Dell Technologies' current 80.6% ownership in VMware, Dell Technologies would receive approximately $9.3 - $9.7 billion.
At the transaction closing, Dell Technologies shareholders would receive approximately 0.44 shares of VMware for each share of Dell Technologies that they hold.
The transaction is expected to close during the fourth quarter of calendar 2021, subject to certain conditions, including receipt of the regulators’ approval.
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