- Fortune Brainstorm Tech
- On Monday, VMware CEO Pat Gelsinger made his first public appearance since Dell announced that it wouldn’t be reverse-merging with the company after all.
- He can’t help but smile when asked about how VMware wiggled out of Dell’s grasp.
- He believes that everyone walked away happy with the alternative deal that Dell agreed to: going public in a deal paid for by VMware, but that leaves VMware independent.
- As for talking to Intel about the CEO job, he repeated, “I’m very happy running VMware.”
VMware CEO Pat Gelsinger can’t help but smile when asked about the boardroom drama that consumed his company for months, but that successfully resolved itself – in his favor, no less – earlier this month.
He’s diplomatic about it, of course. But it’s clear that Gelsinger won his battle. And he knows it.
On stage at the Fortune Brainstorm conference in Aspen, Colorado on Monday, Gelsinger was asked about the deal with Dell Technologies, which holds a controlling stake in VMware, and which was considering a reverse-merger that would see Dell go public by gobbling up the company. Dell ultimately opted to go public via a different route.
Gelsinger explained that shareholders are happy because all of them got a special dividend in Dell’s ultimate deal, and because the cloud of uncertainty over the future of VMware is lifted.
Moreover, Gelsinger said that Dell’s involvement in the company has been good for VMware, overall. When Dell bought EMC for $67 billion, it also acquired EMC’s controlling stake in VMware as part of the package.
“Dell has been a huge accelerant of our growth,” Gelsinger said, a nod to his master. “But we continue to have a great independent board and ecosystem and Michael [Dell] is cheering us on.”
The concept of Dell pulling off its reverse-merger with VMware was largely derided by shareholders, Wall Street analysts, and pretty much everyone else with any skin in the game. Dell ultimately scrapped the idea, and instead opted for a plan where it will swap shares of itself for the publicly-traded “tracking” shares of VMware. VMware agreed to pay for the deal with the $11 billion special dividend to shareholders that Gelsinger referred to.
This bit of financial maneuvering allows Dell to get its hands on VMware’s cash stash, an irresistible benefit for the debt-laden Dell, while VMware maintains its independence.
There were questions over if Gelsinger would have stayed at VMware if it ceased to be an independent, public company. Armchair pundits can’t help to point out that his old employer, Intel, is looking for a new CEO, and how Gelsinger is well qualified.
When asked about the Intel CEO search, he joked that if the chipmaker called, he would send them AMD CEO Lisa Su’s name – a friendly nod at Su, who was on stage with him. Beyond that, he simply restated that he’s “very happy running VMware.”
So, if he does talk to Intel, he’s not going to advertise it until and unless he actually takes the job. In the meantime, his smile is proof that he might truly be happy at VMware.