Partners Eager For Close Of Dell-EMC Deal

They've been waiting 10 months, and now partners are champing at the bit for the close of Dell's landmark acquisition of EMC.

Michael Tanenhaus, CEO of Mavenspire, an Annapolis, Md.-based solution provider that works with Dell and EMC, said he's looking forward to the cross-selling opportunities the merger will bring.

"As a partner, being able to do the cross-selling is the best," Tanenhaus said. "You can go to EMC customers we've maybe never been successful selling Dell storage to. We can talk about doing things with EMC technology that maybe were harder to do with Dell technology."

[Related: EMC Channel Chief Denies Post-Merger Exit, 'Jazzed About My Future With Dell']

Dell Chief Integration Officer Rory Read has said the companies were prepared to close the transaction – announced last October – within two weeks of receiving anti-trust approval from Chinese regulators, which means the deal could close this month if China approval is imminent.

Sources also told CRN that the acquisition, currently valued at approximately $65 billion, will close "well before the September-October expectations."

From the beginning, Dell executives have said they expect the deal to close before the end of October.

Sources close to the process told CRN that Dell is hesitant to make assumptions about the approval, even if it is a lock. "The process is moving along well, but regulatory approvals take time and are not always predictable," one source said, "and with [China] you never bank on something unless you get it in writing."

Tanenhaus said closing the deal should be a mere formality for the two IT giants once China anti-trust regulators give it the stamp of approval.

"As far as most people are concerned the deal is done, it's happened," Tanenhaus said. "Ever since the [EMC shareholder] vote went through [in July], they've been able to communicate more, and when this thing is finally signed and sealed, a bunch of things will go out that they've had to hold onto," like announcements around specific leadership roles.

A top executive at a large national reseller that works with Dell and EMC told CRN he also expects the deal to close quickly once China issues an approval, possibly by the end of the month.

"Once they get regulatory approval, they'll announce it," the reseller executive said. "But I think they really don't know [when China approval will come]. I think China is a big black hole. I heard early August. Now it's late August. China does what China wants, and there's not really anything you can do about it."

The companies are probably keen to close the deal as quickly as possible after China's approval in order to minimize the likelihood of being affected by market forces that could impact publicly-traded EMC's value, the reseller executive said.

"The economy goes south, or something shows up that impacts the stock market and equities drop 8 percent. For those reasons, if they get approval from China, they're going to announce the thing within hours or days," the reseller executive said. "They could delay a press release for a couple of days, but rumors, leaks, stuff that affects the stock price for a deal that is now absolutely going to happen, they would be very cognizant of that and they don't want to hang around for a week or a month."

One solution provider executive who wished to remain anonymous told CRN that Dell has provided him with a timeline for the deal that indicates it could close before the end of August, possibly in time for the annual VMworld conference, which is scheduled for Aug. 28-Sept. 1 in Las Vegas.

"They talked about holding off until Dell World [in October], but decided against it," the solution provider executive said.

Already, the Chinese anti-trust process has taken almost as long as it is allowed to take.

August marks six months since Dell first applied for anti-trust approval from China's Ministry of Commerce, or MOFCOM. That process must be completed within a maximum of 180 days, according to the U.S. Chamber of Commerce, and only rarely takes that long. Most applications are approved within 30 days, and the vast majority are approved within 120 days, according to international law firm DLA Piper's "Practical Guide to Merger Control in China."

However, MOFCOM's October 2015 approval of storage drive vendor WD's acquisition of rival HGST took over two-and-a-half years, and the two firms were required to maintain separate teams for another two years.

Analysts have speculated that anything from political tensions over the South China Sea, or Chinese government officials wary about Dell's stronger competitive posture with China-based Lenovo could have dragged approval to the eleventh hour.

The merger, considered the biggest in the history of the IT industry, was announced last October and quickly received anti-trust approval from U.S. and European regulators.

EMC shareholders approved the transaction, which creates a more-than $70 billion global IT conglomerate, in mid-July. As originally proposed, the deal was worth about $67 billion. The acquisition includes VMware, and its value fluctuates with VMware's stock price, which now has the deal's value hovering around $65 billion.