We all knew that the Dell – EMC merger will not go smooth, especially as it will put the former $59.1 billion in debt, but what the media reported this morning is far, far from smooth.
The media have gotten their hands on a 341-page long document that the two companies have submitted to the United States Securities and Exchange Commission (SEC), that details just about anything an investor or CEO would want to know about a company.
There's a lot of stuff going on in that article, including how dependant Dell is on its PC business, and how important Michael Dell is, to the very existence of the company.
But what really struck a chord with everyone is that Dell is actually planning to sell parts of EMC, in order to cover, to some extent, the expenses of the merger.
Denali Holding Inc. (Dell’s owners) “has an objective of reducing its indebtedness in the first 18-24 months after completion of the merger and achieving an investment grade credit rating for such indebtedness. The cash necessary to achieve that objective is expected to come from divestitures of non-core businesses of the DHI Group, including EMC, cash flows from operations of the DHI Group and cash generated by reductions in the working capital needed to operate the DHI Group,” it says in the document.
What we haven’t been able to dig up just yet is which parts of EMC are planned to be sold. There are many speculations, including the storage business, or the services business that Dell tried to get rid of before. We won’t know for certain just yet.