Dell Technologies recently announced that the company has completed the spin-off of its 81% equity ownership of VMware Inc. The spin-off was completed through a special dividend of 30,678,605 shares of VMware Class A Common Stock and 307,221,836 shares of VMware Class B Common Stock distributed to Dell’s stockholders.
VMware will continue to partner with Dell under a previously announced five-year commercial agreement. The companies will strengthen their mutually beneficial, strategic relationship and continue to co-engineer solutions for customers through a new commercial agreement.
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VMware, which has a market capitalisation of more than $63 billion, is a top software provider for managing data centre and cloud infrastructure. The company launched in 1998 and was acquired by data storage maker EMC six years later for $625 million. VMware became part of Dell when the latter bought EMC in 2016. Dell’s growth plans following the spin-off place a big emphasis on edge computing. VMware will continue to use Dell Financial Services to help its customers finance their digital transformations.
“Today marks an important milestone for both Dell and VMware. We are unlocking significant value for stakeholders while maintaining our close partnership in sales, support and innovation for our customers. We are full speed ahead, solving customer problems, driving progress and capturing opportunities in areas like multi-cloud, edge and telecom,” said Michael Dell, Chairman and Chief Executive Officer, Dell Technologies.
VMware CEO Raghu Raghuram said, “VMware’s mission is to deliver the trusted software foundation that accelerates our customers’ innovation. As a standalone company, we will continue to bring our multi-cloud strategy to life by providing our customers with the power to accelerate their business and control their destiny in this new era”.
VMware has also distributed a special cash dividend of $11.5 billion to all VMware shareholders, including Dell Technologies, which has received $9.3 billion and will use the funds to pay down debt. Dell Technologies has received Investment Grade corporate family ratings from all three major credit rating agencies.
Michael Dell will remain Chairman and Chief Executive Officer of Dell Technologies, as well as chair of the VMware board. The VMware board of directors is unchanged.