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New York - CNBC: Microsoft In Talks To Take Private Dell For $3 Billion

Published on: January 22, 2013 12:13 PM
By: Reuters
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FILE -  Bill Gates, Chairman and Chief Software Architect of Microsoft, talks to students and reporters at Booker T. Washington High School in Miami, 09 July 2001.  EPAFILE -  Bill Gates, Chairman and Chief Software Architect of Microsoft, talks to students and reporters at Booker T. Washington High School in Miami, 09 July 2001.  EPA

New York -  Microsoft Corp is in discussions to invest between $1 billion and $3 billion of mezzanine financing in a buyout of Dell Inc, CNBC cited unidentified sources as saying on Tuesday.

Private equity outfit Silver Lake Partners is trying to finalize a bidding group to take the world’s No. 3 PC maker private, and has opened discussions with potential equity partners, sources familiar with the matter have said.

Dell also has formed a special committee to take a close look at any potential deal on the table, multiple sources with knowledge of the matter told Reuters. If successful, it would be one of the largest corporate buyouts since before the global financial crisis.

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Microsoft, which accelerated its foray into computer hardware in 2012 with the launch of the Surface tablet, will provide the capital in the form of mezzanine financing according to CNBC, which is a hybrid of debt and equity.

Microsoft and Dell both declined to comment on the CNBC report. Shares in Dell gained climbed 2 percent to $13.08 in late morning trade.


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1

 Jan 22, 2013 at 12:47 PM ESmith Says:

There ought to be some Justice Dept. pursuit of anti-trust action agianst this merger. While we have gotten used to mergers being stopped because of ending up with too large a share of a particular market, mergers used to be stopped because of too much vertical integration. In this case, Dell would have access to Microsoft software before other manufacturers, or al least potential access. That ought to be enough to get Justice to take a look.

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 Jan 22, 2013 at 01:12 PM Liepa Says:

Reply to #1  
ESmith Says:

There ought to be some Justice Dept. pursuit of anti-trust action agianst this merger. While we have gotten used to mergers being stopped because of ending up with too large a share of a particular market, mergers used to be stopped because of too much vertical integration. In this case, Dell would have access to Microsoft software before other manufacturers, or al least potential access. That ought to be enough to get Justice to take a look.

'Dell would have access to Microsoft software before other manufacturers', that doesn't necessarily constitute a monopoly which in many cases the courts were concerned about and stopped the deal from going through.

3

 Jan 22, 2013 at 01:54 PM Elchanan Says:

There was a time when Microsoft had such a domination over the computer market that any acquisition of this type would be suspect. However with the increasingly important Android (Google) system running both tablets, let alone Apple's Ipad, the market power is no longer there.
Additionally, vertical integration (standing alone) is very rarely a source of antitrust violation

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