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Dell Inc. has signed a $24.4 billion agreement under which Michael Dell, the company’s founder, chairman and chief executive officer, in partnership with the investment firm Silver Lake, will acquire computer maker.
The transaction, which has been touted as the industry’s biggest buyout in recent years, will see Dell shareholders receive $13.65 in cash for each common share. This represents a premium of 25 per cent over Dell’s closing price of $10.88 on January 11. Dell will remain headquartered in Round Rock, Texas.
Apart from Silver Lake and other organization involved in the deal, software maker Microsoft Corp. also contributed $2 billion to the buyout.
In a statement today, Dell assured shareholders that their investments will be safe in the new company and expressed confidence in its future despite recent setbacks.
“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,” Dell said. “We can deliver immediate value to stockholders, while we continue the execution of a long term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise.”
Dell, who founded the company in 1984, has made great efforts to bring back the lustre to the company when he returned to head it once more in 2007 after handing over leadership to his hand-picked successor Kevin Rollins in 2005.
However, in recent years Dell has steadily lost market share to rivals such as Lenovo
Group. The company has also suffered in its lack of an offering in the white hot tablet and mobile phone market.
The development bodes well for both Microsoft's and Dell's PC and data centre businesses, according to David Johnson, senior analyst for Forrester research.
"Microsoft has been aiming for total control of the uiser experience in both hardware and software and a tigther alliance with Dell can help it achieve that," he said. "On the other hand, Dell can leverage Microsoft's software and R&D resources to help it compete woth the likes of Samsung and Apple."