Dell confirms potential VMware spin-off

Dell looks to increase shareholder value and improve its credit rating

Dell has confirmed it is considering the spin-off of its 81 per cent stake in VMware.

The vendor said it is at an "early stage" in the process and is considering whether an ownership structure would be beneficial, adding that any move would not be made before September 2021.

Michael Dell said: "The strategic relationship between Dell Technologies and VMware has never been stronger.

"For more than 20 years, we've innovated for our customers and created substantial growth and value for both companies and our teams.

"Regardless of the options we are exploring to create additional value, we are accelerating our strategy - which remains unchanged.

"We are focused on winning in the consolidating markets where we operate and innovating across the Dell Technologies portfolio to create integrated solutions that turn data into insights and action."

Rumours of a potential sale first surfaced at the end of last month.

Dell said that a spin-off could potentially benefit shareholders of both vendors by "simplifying capital structures and creating additional long-term enterprise value".

Another key factor is that Dell wants improve its credit rating to "investment grade".

The vendor emphasised that it may decide to keep the ownership structure the same as it is now.