The spin-off is said to give VMware more freedom to implement its multi-cloud strategy, a simplified capital structure and governance model
US tech major Dell Technologies has wrapped up the previously announced spin-off of its 81% stake in cloud computing and virtualisation technology firm VMware.
By spinning off the stake, Dell Technologies has secured $9.3bn in proceeds, which will be used for paying down its debt. The amount is part of the special cash dividend of $11.5bn distributed by VMware to all its shareholders, including Dell Technologies.
The spin-off was announced in April 2021. It was completed with VMware’s allocation of a special dividend of over 30.6 million of its Class A shares and over 307.2 million of its Class B shares distributed to Dell Technologies’ stockholders as of 29 October 2021.
VMware said that the separation from Dell Technologies gives it more freedom to implement its multi-cloud strategy, a simplified capital structure and governance model, as well as additional flexibilities in its operations and finances.
VMware CEO Raghu Raghuram said: “VMware’s mission is to deliver the trusted software foundation that accelerates our customers’ innovation.
“As a standalone company, we will continue to bring our multi-cloud strategy to life by providing our customers the power to accelerate their business and control their destiny in this new era.”
Dell Technologies and VMware will retain a commercial agreement that preserves the most valuable parts of their relationship. These include the joint development of critical solutions and alignment on marketing and sales activities, while allowing strategic flexibility.
The cloud computing and virtualisation technology firm will continue to use Dell Financial Services for helping its customers in financing their digital transformations.
Dell Technologies chairman and CEO Michael Dell said: “Today marks an important milestone for both Dell and VMware. We are unlocking significant value for stakeholders, while maintaining our close partnership in sales, support and innovation for our customers.
“We are full speed ahead, solving customer problems, driving progress and capturing opportunities in areas like multi-cloud, edge and telecom.”
Dell Technologies had gained the majority stake in VMware through its $67bn acquisition of EMC in 2016.