Photo: Flickr/Masaru Kamikura
Dell announced plans to go private in a deal valued at $24.4 billion.As a part of the financing of the buyout, Microsoft is loaning Dell $2 billion.
This is particularly noteworthy for a number of reasons.
It would appear to keep Dell on a leash, preventing it from doing something rash like testing Google services like Google Drive, Chrome, or Android.
It also appears as though Microsoft is bailing out one of its ailing PC partners. If you run Asus, Acer, HP, or any other big PC company, you can’t be happy that Microsoft is seemingly playing favourites.
Remember, the PC industry as a whole is in a state of contraction. Sales are down on a year over year basis as people shift to smartphones and tablets.
If Microsoft is willing to bailout Dell, will it be willing to bail out HP when HP’s death spiral gets out of control?
After reading the terse explanation from Microsoft on why it loaned money to Dell, the answer seems to be “yes.”
Here’s the four sentence explanation from Microsoft about its $2 billion loan:
“Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long-term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.
We’re in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.”