Michael Dell, who founded his company 32 years ago in his dorm room, is excited about the tech world's biggest merger yet. "This is fun for me," he says. "If you told me I couldn't do this, I'd be depressed."
When he announced that Dell and data storage giant EMC are merging for a whopping $67 billion, many people were taken aback. Aside from the usual failures associated with mergers of this scale, Dell is also taking on a lot of debt to the tune of $40 billion, Digital News Asia reported.
However, Dell, as an individual and as a company, is not concerned about any of this, The Irish Times noted. The fact is that Dell has one of the best histories in terms of mergers. They have avoided the dreaded "Frankenstein mergers," in the past. "Frankenstein mergers" are those agreements which try to get the best parts of the companies and mix them up, according to Tech News World.
They also have one of the best processes in terms of mergers and acquisitions. Unlike other tech mergers which ultimately failed, most notably the HP-Compaq merger, Dell took great pains to make sure that they covered all their bases.
The HP-Compaq merger failed on many levels but it is unlikely that Dell will follow in its footsteps. First, Dell is run by its founder so there the company's direction is solid. Second, Dell is a private company. Many CEOs will agree that running a private company is much easier and changes can be implemented much faster.
Dell will also retain EMC as a standalone company instead of carving up the best pieces and throwing the rest away. This is good news for EMC since Dell has been consistent in adding value to the acquired company instead of taking it away. In the HP-Compaq deal, Compaq was completely erased from the map.
The fact that the rest of Dell also agrees with the merger is a good thing since nobody within the company will seek the merger's collaps. Dell's EMEA president Aongus Hegarty says, "I think there's some very good synergy and not a lot of overlap."
He adds, "If you look at the profile of customers and where EMC's business is very strong, it is mostly in large high-end customers. If you look at our business, it's strong from small business and consumer all the way up into those midsized and larger companies but not as strong as they would be at the very big customers and entities."
Do you think the Dell-EMC merger will be good for both companies? Share this article if you think so!
