<p>Dell Technologies Inc said on Wednesday it would spin off its 81% stake in cloud computing software maker VMware to create two standalone public companies, in a move that will help the PC maker reduce its pile of debt.</p>.<p>VMware is currently Dell's best-performing unit as it has benefited from companies looking to cut costs and move to the cloud, a shift that has been accelerated by the Covid-19 pandemic.</p>.<p>Shares of Dell rose more than 8% in extended trading.</p>.<p>VMware will distribute a special cash dividend of between $11.5 billion and $12 billion to all of its shareholders, including Dell, which will receive between $9.3 billion and $9.7 billion.</p>.<p>For Dell, the special dividend will help reduce its long-term debt of $41.62 billion, much of which was taken on during its $67 billion acquisition of VMWare's then-majority owner EMC in 2016.</p>.<p>The companies said the deal will simplify their capital structures. Both companies will also enter into a commercial arrangement to continue to align sales activities and for co-development of solutions.</p>.<p>VMware, whose software helps companies squeeze more work out of data center servers, has been looking for a chief executive officer after previous boss Pat Gelsinger was tapped to lead Intel Corp.</p>.<p>The spinoff plans were originally announced by Dell in July last year. The deal is expected to close in the fourth quarter.</p>
<p>Dell Technologies Inc said on Wednesday it would spin off its 81% stake in cloud computing software maker VMware to create two standalone public companies, in a move that will help the PC maker reduce its pile of debt.</p>.<p>VMware is currently Dell's best-performing unit as it has benefited from companies looking to cut costs and move to the cloud, a shift that has been accelerated by the Covid-19 pandemic.</p>.<p>Shares of Dell rose more than 8% in extended trading.</p>.<p>VMware will distribute a special cash dividend of between $11.5 billion and $12 billion to all of its shareholders, including Dell, which will receive between $9.3 billion and $9.7 billion.</p>.<p>For Dell, the special dividend will help reduce its long-term debt of $41.62 billion, much of which was taken on during its $67 billion acquisition of VMWare's then-majority owner EMC in 2016.</p>.<p>The companies said the deal will simplify their capital structures. Both companies will also enter into a commercial arrangement to continue to align sales activities and for co-development of solutions.</p>.<p>VMware, whose software helps companies squeeze more work out of data center servers, has been looking for a chief executive officer after previous boss Pat Gelsinger was tapped to lead Intel Corp.</p>.<p>The spinoff plans were originally announced by Dell in July last year. The deal is expected to close in the fourth quarter.</p>