Rumours had been circulating over the past week that Dell was in talks to buy EMC and they were confirmed last night in a joint statement by the two companies in New York last night.
EMC was believed to be looking for a buyer for many months but Dell only came into the equation recently.
According to a Wall Street Journal report, Michael Dell, who took the company he founded private in 2012, will need to raise US$45 billion to finance the massive takeover. And the company already had a reported US$12 billion in debt, prompting at least one analyst to express surprise that financing for the deal would be approved.
The takeover bid US$33.15 per share, accepted by EMC, values the company at a 28% premium to its overnight market cap.
Virtualisation leader VMware, which is 80% owned by EMC, will continue as a listed company, with Dell the largest shareholder, according to the announcement.
It will also provide a convenient exit for longstanding 68 year old EMC CEO Joe Tucci, who was said to be planning his retirement.
EMC, which had already flagged that it was contemplating a large number of layoffs in order to cut nearly US$1 billion in expenses will now pass the torch to Dell, which is likely to result in an even larger number of retrenchments as a result of the consolidation.