In a stock and cash deal expected to top $30-billion, Apple, Inc. will purchase PC computer maker Dell.
In a hastily prepared news conference after the secret deal became public, CEO Steve Jobs and Dell CEO Michael Dell said the purchase will benefit both companies, but especially Dell shareholders who had clamored for years for Dell to close down his company and give the money back.
Apple And Dell Stock Surge
Apple stock reached a record high again today at nearly $236 per share, while total market cap nears $220-billion. Meanwhile, as news of Dell’s demise hit Wall Street, the Texas company’s stock skyrocketed 3-cents, to over $15, still less than the $16 per share price offered by Apple.
The deal to buy Dell is a 50-50 split of cash and Apple stock.
Apple CEO Steve Jobs said the cash would go to pay off Dell’s shareholders, while Michael Dell would become a member of Apple’s board of directors.
Dell shareholders would also receive one share of Apple stock for every 28 shares of Dell stock.
Following an interview with Apple COO Tim Cook, Time magazine reports that Apple will fulfill all Dell’s current orders for computers, but all Dell PCs shipped since Windows Vista’s launch would automatically be retrofitted with Windows XP.
Dell’s plans for a music player and cell phone have been scrapped, resulting in a layoff of all four engineers assigned to the project at Dell’s headquarters. Jobs and Dell expect more layoffs as the companies work to combine their respective workforces.
Jobs pointed out that Apple’s huge new data center on the East Coast still needs to be finished.
“What better way to utilize Dell’s engineers than digging ditches or painting offices or moving potted plants around,” said Jobs. Dell’s CEO said he was looking forward to working with Jobs at Apple and already had a number of ideas to help maintain the shine on Jobs’ Mercedes-Benz. Dell admitted that it would be difficult to obtain a chauffeurs’ license since he was not yet a California resident.
The news of Dell’s demise surprised technology pundits and Wall Street analysts. Industry consultant Rob Enderle asked, “Does this mean I’m no longer on Dell’s payroll?”
Apple CEO Jobs said the deal to purchase Dell would be completed by the end of the day, and all unfilled orders for Dell products would be replaced with Macs running OS X. Customers would be charged the difference.