VMware says Dell partitioning means 'increased independence'

Dell Technologies is discontinuing its 81 percent equity ownership of VMware, a virtualization firm it says will provide itself with "increased freedom" without sacrificing the benefits of its strategic partnership.

Dell plans to pay a special dividend of between $ 11.5 and $ 12 billion to VMware shareholders. According to news released on April 14, Dell will receive anywhere between $ 9.3 to $ $ 9.7 billion, depending on current ownership in VMware. The transaction is expected to close during the fourth quarter of calendar 2021.

The goal for both companies is to work best and work on co-developed solutions. For Dell, this means an emphasis on core infrastructure and PC business with a growing partner ecosystem. VMware will continue to use Dell Financial Services to help its clients finance their projects.

"By spinning VMware, we hope to unlock further development opportunities for Dell Technologies as well as VMware," said Michael Dell, president and chief executive officer of Delware Technologies. “The two companies will remain important partners, giving Dell Technologies a distinct advantage in how we bring solutions to customers. At the same time, Dell Technologies will continue to modernize its core infrastructure and PC businesses and embrace new opportunities through an open ecosystem to grow into hybrid and private cloud, edge and telecom. "

Michael Dell will have to remain president and CEO of Dell Technologies and chairman of the board of VMware, so when the spin-out is taking place, the two tech giants are tightly connected.

Zen Rowe will remain the interim CEO for VMware with no change on its board of directors.

In a separate press release, VMware said that Split gives them "the freedom to execute their strategy, a simplified capital structure and governance model and additional strategic, operational and financial flexibility, while maintaining the strength of the strategic partnership of the two companies" keeps."