EMC makes plans for its third acquisition in less than a year

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EMC Corp. is looking to become bigger and better with a definitive agreement to acquire VMware Inc., of Palo Alto, Calif.

 EMC is set to pay $635 million in cash for the privately held software company that specializes in Intel-based virtual computing software. The companies expect to close the transaction in the first quarter of 2004.

 EMC says VMware's virtualization technology will help healthcare providers configure and reconfigure their computer and storage environments with no downtime. EMC also expects VMware's server virtualization technology to complement EMC's storage virtualization products to serve as a foundation for next-generation information lifecycle management technology.

 VMware's technology is designed to enable multiple operating systems -- including Microsoft Windows, Linux and NetWare -- to run simultaneously and independently on the same Intel-based server or workstation and move live applications across systems with no business disruption.

 When the acquisition is completed, EMC expects to take a charge of approximately $15 million to $20 million in the first quarter of 2004 for the value of VMware's in-process research-and-development costs and other integration expenses.

 EMC also plans to keep VMware as a software subsidiary and maintain its headquarters in Palo Alto. Diane Greene, VMware's current president and CEO will remain in those two positions.