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HP Blasts Dell's Sale, Calling It 'Not Good for Customers'

By Craig Galbraith
February 06, 2013 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q4 2012 or here for the biggest M&A during that time in the service provider-BSS/OSS spaces.**

HP, one of Dell's chief competitors in the PC market, is wasting no time attacking the Round Rock, Texas-based manufacturer for selling itself.

Dell's co-founder, Michael Dell, announced yesterday that he and global technology investment firm Silver Lake intend to buy out the computer giant for $24.4 billion and take it private.

"Dell has a very tough road ahead. The company faces an extended period of uncertainty and transition that will not be good for its customers," HP said in a prepared statement. "And with a significant debt load, Dell's ability to invest in new products and services will be extremely limited. Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell's customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity."

Michael Dell, who currently owns 14 percent of the company, will continue to serve as chairman and CEO of the new Dell. As PC sales wane, the company is starting to focus more on being a supplier of enterprise-grade IT infrastructure.

Microsoft is loaning $2 billion for the purchase and a handful of banks are contributing debt financing. Assuming it gets regulatory approval and meets closing conditions, expect the deal to wrap before the end of the second quarter of Dell's 2014 fiscal year.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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