• VMware is surging in early trading.
  • VMware shareholders will choose between receiving cash or stock in the transaction.
  • Dell shares are also rallying.
  • Watch

VMware is surging Monday morning, trading up 9.56%, after its parent company, Dell Technologies, said it will buy out the shares that track its performance as part of a broader effort to simplify its ownership structure.

Dell is offering VMware shareholders 1.3665 class C common Dell shares in exchange for each VMware share. Alternatively, VMware shareholders could opt for $109 in cash. After VMware shareholders choose whether they want cash or Dell stock, they'll own between 20.8% and 31% of Dell.