WHEN: Today, Monday, October 12th
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of a CNBC interview with Dell Chairman & CEO Michael Dell and EMC Chairman & CEO Joe Tucci on CNBC's "Squawk Box" (M-F, 6AM-9AM ET). Following is video from the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000431347, http://video.cnbc.com/gallery/?video=3000431390 and http://video.cnbc.com/gallery/?video=3000431348
All references must be sourced to CNBC.
Michael Dell, Dell Chairman & CEO:
DELL ON BUYING EMC
About a year ago I contacted Joe and we had a number of conversations. We entered into an NDA with the board of EMC and we've been having productive discussions over the course of this year leading us to this great day here where we're creating an unbelievable powerhouse of enterprise company…this is really all about bringing together complimentary technologies and helping our customers address the challenges and opportunities that this digital future is creating.
DELL ON DIGITAL EXPLOSION
IT for a long time has been about how do you make old processes more efficient. But with all of the progress in digital technology, there is a kind of digital transformation that is occurring. And you see it with the explosion in the number of devices, you see it in the explosion in the number of applications. This is creating enormous amounts of data, you hear topics like big data, the internet of things. All of this has to be turned into results and outcomes and success for companies. And so there's both pressure on the legacy environments and a need to enter this new age.
DELL ON VMWARE
We also built an incredible server business and that's an important part of this combination. Remember what's going on with virtualization, certainly where VMware has a unbelievably strong position. The way to containerization, which VMware is also well positioned for. You're seeing this sweep across the entire data center. The anchor tenet in all of that is the compute engine.
DELL ON FUTURE PLAN
We are very focused on, in the first 18 to 24 months, a significant reduction in the debt, which is going to come from certainly the cash flow of the combined companies which is quite powerful. Some cost synergies, but importantly, the revenue synergies here are about three times larger than the cost synergies.
DELL ON GOING PRIVATE
We just went private. So, we're really enjoying the private control structure. I think you can see that it gives us great flexibility as a company.
Joe Tucci, EMC Chairman & CEO:
TUCCI ON PARTNERS
We have the assets between us now and the heft to make sure that we can help customers with digital transformation, help them with their cloud computing needs both on and off premise, help them with their infrastructure needs and really have broad solutions and have some great partners that are going to work with us to really give customers. Because when you to talk to CIOs around the world, they really want less and stronger partners. And this gives us a real good foothold in this market.
TUCCI ON GO-SHOP CLAUSE
There is a go-shop clause. I want to say point blank we think this is a great alternative and this is where we're heading forward. But there is a go-shop clause and we will do our duty to make sure we get the best deal for our shareholders and time will show.
TUCCI ON TRACKING STOCK
Time will tell. Tracking stocks have been used many times but it's not an ordinary course of occurrence. So I think it's going to take a little bit of time to understand what we're doing here. But we do believe over the long time, it should trade close to the projected price, which when we set the exchange ratio at $33.15 per share for the EMC shareholders. So I think you just got to let it trade through the markets.
TUCCI ON SHAREHOLDERS
We haven't explained it to the shareholders yet. They don't know all the details. We're confident as we explain the details that it should track very well with the VMWare stock. We're going to help VMWare with synergies and then of course it should be a deal that trades very well and very favorable to the EMC shareholders.
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