Dell splits from VMware

The tech heavyweight is expected to receive up to $9.7bn from the payout, and is considering a sale of Boomi

Dell Technologies has agreed to spin-out its 81 per cent stake in software manufacturer VMware.

The vendor first announced it was weighing up a sale in July.

VMware will pay a special cash dividend of between $11.5bn to $12bn (€9.6bn to €10.026bn) to shareholders at the close of the transaction, which is expected by Q4.

Dell will receive around $9.7bn (€8.1bn) from the payout.

"By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders," said the tech giant's chairman and CEO, Michael Dell.

"Both companies will remain important partners, with a differentiated advantage in how we bring solutions to customers."

Zane Rowe, chief financial officer and interim chief executive officer of VMware, added: "We will have an enhanced ability to extend our ecosystem across all cloud vendors and on-premises infrastructure vendors and a capital structure that will support growth opportunities.

"Our strategic partnership with Dell Technologies remains a differentiator for us, and, as we execute on our multi-cloud strategy, we continue to provide customers our solutions and services on any public cloud and any infrastructure."

Cuts elsewhere

The tech heavyweight has been trimming the fat and offloading various businesses as of late.

It is also reviewing a potential sale of its cloud business Boomi, which it originally acquired in 2010.

Dell is working with a financial adviser on the sale, which could be valued at up to $3bn (€2.5bn), according to Bloomberg.

Last year, it also sold cybersecurity unit RSA for $2.08bn (€1.7bn) to a private equity firm.