Exclusive - EMC to keep majority stake in Virtustream - sources

Reuters News
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Posted: Nov 24, 2015 3:13 PM

(Reuters) - EMC Corp <EMC.N> plans to keep a majority stake in cloud services provider Virtustream, abandoning earlier plans to place it in a joint venture with its virtualization software company VMware Inc <VMW.N>, people familiar with the matter said.

The move underscores an effort by EMC to boost the value of VMware by assuming the losses of Virtustream. Special shares that track the stock of VMware will be used to help pay for Dell Inc's planned acquisition of EMC, so underperforming VMware shares would weigh on the value of the deal.

VMware would keep a minority stake in Virtustream under the new plan, the people said on Tuesday. EMC may publicly announce the plan as early as December, one of the people added.

The sources asked not to be identified because the matter is not public. EMC and VMware declined to comment.

(Reporting by Liana Baker and Greg Roumeliotis in New York; Editing by Bill Rigby)