Dell Completes Spin-Off Of 81% Equity Ownership Of VMware

By Noah Long ● Nov 2, 2021
  • Dell Technologies (NYSE: DELL) announced it has completed the spin-off of its 81% equity ownership of VMware. These are the details.

Dell Technologies (NYSE: DELL) announced it has completed the spin-off of its 81% equity ownership of VMware Inc. The spin-off was completed through a special dividend of 30,678,605 shares of VMware Class A Common Stock and 307,221,836 shares of VMware Class B Common Stock distributed to Dell’s stockholders of record as of 5:00 p.m. ET on October 29, 2021. 

And each share of VMware Class B Common Stock was converted into one share of VMware Class A Common Stock in connection with the distribution and prior to the receipt by Dell’s stockholders of such shares. The Dell stockholders are receiving cash in lieu of any fractional shares of VMware Class A Common Stock. This spin-off creates two standalone companies positioned for growth in the data era.

Dell Technologies and VMware will retain a strong commercial agreement that preserves the most valuable parts of the companies’ relationship like the co-development of critical solutions and alignment on sales and marketing activities while allowing strategic flexibility. And VMware will continue to use Dell Financial Services to help its customers finance their digital transformations.

VMware also distributed a special cash dividend of $11.5 billion to all VMware shareholders, including Dell Technologies — which has received $9.3 billion and will use the funds to pay down debt. And Dell Technologies has received Investment Grade corporate family ratings from all three major credit rating agencies.

Michael Dell will remain chair and chief executive officer of Dell Technologies as well as chair of the VMware board. And the VMware board of directors is unchanged.

KEY QUOTE:

“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.”

— Michael Dell, chairman and chief executive officer, Dell Technologies