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Dell bids adieu to the era of big acquisitions, concentrates on paying down debt and Michael's new book
Partnerships are our future, says tycoon
Dell CEO Michael Dell once loved big-ticket acquisitions, but not anymore.
Dell ruled out major takeovers in the future, and will instead focus on partnerships for product offerings, he said during an analyst presentation livestream on Thursday.
The biz that bears his name went on a string of acquisitions through the last decade as it expanded into software, server, PC and storage offerings. The most notable was the $67bn merger in 2016 with EMC, which included VMWare, to create the world's largest private company at the time.
Dell in April this year announced plans to spin off VMware to create two separate companies. While the EMC acquisition paid off, others like Perot Systems and Boomi backfired and were sold. Like Alphabet, Dell was more a parent company with a consortium of companies operating independently.
"I wouldn't hold your breath for any large transactions like that. Our M&A is going to be targeted," Dell said. "We went through a big transformation and had a complicated capital structure and didn't have steps that simplified that."
Dell is better off partnering with, than owning, companies to co-create products and services, he opined.
"That a blueprint for what we can do in the future," Dell said.
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Dell is also paying off debt that has burdened the company after the merger with EMC. The IT giant expects its debt load to be $29bn by the end of this financial year, down from $33.4bn in the previous year.
The company also has an investment arm focused on smaller and strategic investments. Dell Technologies Capital poured an undisclosed amount in server chip maker Nuvia, which was purchased by Qualcomm earlier this year for $1.4bn.
Responding to a question during the livestream on how his past acquisition spree would reflect on his legacy, Michael Dell somehow managed to expertly plug his book being released next month: Play Nice But Win: A CEO's Journey from Founder to Leader.
"The most important and exciting chapter isn't in the book: it's the next chapter, the one we're writing now," Dell said. ®