Dell Reportedly Exploring Reverse Merger With VMWare, Potential IPO

Dell Inc. is reviewing strategic alternatives including an initial public offering or a some form of a merger with VMware, Inc. VMW, according to Monday reports.

The Wall Street Journal said Dell is in early stage discussions with VMware, a cloud infrastructure company with a $55.7-billion market cap, to purchase its remaining stake. Dell already owns 80 percent of the target through EMC, which it subsumed in 2016.

Conversely, a CNBC report suggested Dell could be the seller in the arrangement. A reverse merger with VMware would allow Dell to rejoin the markets without a formal listing.

The buyout or IPO, which would come just years after the company went private in 2013, could bring in enough cash to pay down $51 billion in debt.

Dell is also reportedly considering other acquisitions and alternatives with the exception of an outright sale of itself or its VMware stake. Dell’s board of directors will reportedly meet later this month to discuss options.

At the time of publication, Dell Technologies Inc DVMT, which holds Dell assets, was down more than 5 percent percent, while VMware was down 9.55 percent.

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