What’s at the core of the deal

Data storage was PC maker’s weakest link; merger means leg up

And how leadership has evolved as the Internet grows up,

Computer technology giant Dell and private-equity firm Silver Lake will buy data storage provider EMC for roughly $67 billion, a $33.15-per-share deal that would represent the largest in tech industry history.

The deal’s $33.15 per-share cost represents a 28% premium above EMC’s closing price Oct. 7, when news reports of the pending transaction first surfaced.

CompuDell is offering EMC shareholders about $24.05 a share in cash and $9.10 of a tracking stock tied to EMC’s stake in VMware, which will remain a publicly traded company under the transaction terms.

Along with the tracking stock, privately owned Dell will finance the deal with new common equity from founder, CEO and Chairman Michael Dell, Silver Lake and other backers, plus new debt financing and cash on hand.

The deal is likely to close by October 2016.

The combined firm will focus on paying down debt during the 18 to 24 months after the closing, Dell and other officials said in a conference call after the announcement.

Dell will lead the company as chairman and CEO after the closing. Joe Tucci, EMC’s CEO, will remain as chairman and CEO of EMC until the closing, and no changes of other top executives or any immediate plans for layoffs are expected, officials said.

The combined firm will have three technology hubs, in Austin, near where Dell is based, in Silicon Valley and in Massachusetts, EMC’s base.

EMC shares closed up 1.76% at at $28.35. Shares of VMware closed down 8.11% at $72.27.

The deal represents a coup for Dell, who two years ago took the personal-computer maker he founded private with backer Silver Lake in a $25 billion buyout. It also marks a major milestone in his march to reinvent Dell as an enterprise player focused on data storage and security amid a changing tech landscape.

“The combination of Dell and EMC will create the industry leader” in the $2 trillion information technology markets where they have complementary portfolio technologies and other resources, Dell said during the conference call. “This transaction also strengthens both companies in the increasingly competitive global marketplace.”

Picking up EMC’s storage and software businesses makes Dell the No. 3 player in enterprise technology by revenue, trailing Hewlett-Packard and IBM.

Tucci said during the call the megadeal makes strategic sense because the tech industry is undergoing “a tremendous transformation ... where traditional information technology “is being incredibly disrupted.”

But the changes also herald “vast opportunity,” Tucci said. He added that private ownership un- der Dell would enable the combined firm to incubate enterprise products, including cloud-based tech offerings, as well as “plan for the long term.”

Being privately controlled, without the need to report each quarter’s financial results to Wall Street, “gives us great flexibility,” Dell said.

Tech industry analysts and others gave the deal generally favorable reviews.

Forrester Research analyst Glenn O’Donnell says the combined company represents a serious competitive threat to Hewlett-Packard.

“Dell is fairly weak on storage, and EMC will help give it a full portfolio that it needs to compete with HP, Cisco, IBM, and the growing threat from Huawei,” O’Donnell said in an email.