Dell's EMC acquisition hits financing challenge

Dell's EMC acquisition hits financing challenge

The New York Post is reporting that the Dell/EMC merger is being slowed by tight credit market

The devil is in the details: A global credit slowdown has, reportedly, thrown a wrench in Dell's EMC acquisition plans.

The New York Post's Josh Kosman reported that the JPMorgan-led group of banks has pushed the timeline back 10 days in order to get the needed loans for the first $10 billion on the purchase.

To make matters worse, Dell's sale of Perot Systems, which it had hoped to earn $5 billion on, hit a roadblock when one of the leading potential buyers pulled out.

As Kosman reports:

Investors are increasingly jittery about the EMC deal. Dell execs keep insisting the purchase will close by October — despite concerns about the sheer debt, the complexity of the transaction and getting regulatory approval.

If Dell can’t complete the deal, the closely held company is on the hook for a $4 billion breakup fee. Founder and CEO Michael Dell, along with a group of private equity investors, took the company private in 2013 after battling shareholders.

With so much at stake, there's a lot of motivation to make the deal happens, one way or another.

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