Today is the day that EMC shareholders vote to merge with Dell, or tell Michael Dell to go sling his hook.
The merger was announced last October and will create a more-than $70 billion global IT powerhouse with significant strengths from PCs to security and the high-end data centre.
EMC had been under pressure from shareholders to be broken up so being swallowed whole came as a bit of a surprise. The company’s enterprise business will be run from EMC’s headquarters in Hopkinton – a place in America somewhere – while the rest of the business will be run from Dell’s house in Texas.
There is no guarantee that Dell will manage to convince shareholders. However, the signs are that it will be rubber stamped. The deal has received the seal of approval from two independent proxy firms, ISS and Glass Lewis, and hasn’t been the subject of any public investor unrest. But nothing is certain. Dell’s Empire has a debt loading which makes my credit card bill look very small potatoes.
Still the deal is worth $62.3 billion.
Shareholders are being asked to approve the merger, vote to give huge “go away” payments to top EMC executives as a result of the merger. This is basically giving $90 million to EMC Chairman and CEO Joe Tucci; CFO Zane Rowe; EMC Infrastructure President David Goulden; Marketing Chief Jeremy Burton and COO Howard Elias. They will only get the money if they bugger off and never darken Dell’s door again.
Dell himself is quietly confident that everything will go through on time. He thinks that the merger will be completed by October.
