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EMC Jumps, VMware Slides on $67 Billion Dell Buyout — Tech Roundup


NEW YORK (TheStreet) -- Shares of EMC (EMC - Get Report) jumped by 1.8% Monday, closing at $28.35, after Dell announced that it would buy the Hopkington, Mass.-based data storage company for $67 billion in the biggest tech deal ever.

But VMware (VMW - Get Report) , which is majority-controlled by EMC, dropped by 8.1% amid concerns that a tracking stock that will be issued for VMware could dilute that company's value. VMware, which closed Monday at $72.28, is based in Palo Alto, Calif.

Dell CEO Michael Dell and EMC CEO Joe Tucci discussed the deal on CNBC. They said it would benefit shareholders of both EMC and VMware.

The complicated financial transaction would be valued at $33.15 per share for EMC shareholders. It would include $24.05 in cash to EMC shareholders, plus a tracking stock for EMC's 81% stake in VMware. It would also include a significant amount of debt. Read TheStreet's report of the deal.

Dell, who founded his Texas-based company in his dormitory room at University of Texas in Austin more than 30 years ago, told CNBC he expects to see "a significant reduction in debt" within the first 18 to 24 months of the deal. He said that would come...