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March 1, 2016updated 05 Sep 2016 8:09am

EU approves Dell’s $67bn EMC takeover

News: The European Commission said the merged entity would have a moderate market share in external enterprise storage systems.

By CBR Staff Writer

The European Commission has approved Dell’s proposal to acquire data storage firm EMC for $67bn.

This follows approval granted by US regulators last month, with both the firms still awaiting regulatory approval in smaller markets.

EMC shareholders should also approve the deal, which is anticipated to close before Dell’s third quarter ends in July this year.

The deal came under the commission’s scrutiny as Dell and EMC both offer data storage systems, and, especially, external enterprise storage systems.

Dell is also active in servers based on x86 architecture. VMware, a company controlled by EMC, supplies virtualisation software that can be utilised in conjunction with these types of servers and storage products.

The commission’s probe evaluated the effects of the transaction on the market for external enterprise storage systems.

It also looked at the risk that the merged entity could attempt to restrict or degrade access to VMware’s software for competing hardware vendors.

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The commission found that the merged entity will have a moderate share in the market for external enterprise storage systems and in any event the increment brought about by the merger is small.

It said that the merged entity will continue to face stiff competition from established players, including Hitachi, HP, IBM and NetApp, as well as from new entrants.

EU competition commissioner Margrethe Vestager said: "Given the strategic importance of the data storage sector, I am pleased that we have been able to approve Dell’s multi-billion dollar takeover of EMC within a short space of time while making sure that there would be no adverse effects on customers.

"I appreciate the close cooperation we have enjoyed with our US counterparts at the Federal Trade Commission."

The combination of Dell and EMC will create the world’s largest privately-controlled, integrated technology company.

The combined company will be a leader in the high-growth areas of the $2 trillion information technology market with complementary product portfolios, sales teams and R&D investment strategies.

It will have strong capabilities in the areas of digital transformation, software-defined data centre, hybrid cloud, converged infrastructure, mobile and security.

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