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Friday 9 December 2016

Dell reportedly in talks with EMC for one of biggest ever tech mergers

Mike Stone

Published 08/10/2015 | 07:55

Dell logo
Dell logo

Dell, the world's third largest personal computer maker, is in talks to buy data storage company EMC, a person familiar with the matter said, in what could be one of the biggest technology deals ever.

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Dell is also talking to banks to finance an all-cash offer for the Hopkinton, Massachusetts-based company, the person told Reuters on condition of anonymity because the negotiations are confidential.

The terms of the negotiations were not immediately known. EMC has a market capitalization of about $50 billion as of yesterday's close.

A potential deal could further strengthen Dell's presence among corporate clients at a time when Michael Dell has been trying to transform the company he founded in 1984 into a complete provider of enterprise computing services such as Hewlett-Packard Co and IBM.

Both Dell and EMC declined to comment.

The news of the deal talks comes two years after Dell was taken private for $24.9bn by founder Michael Dell and private equity firm Silver Lake, ending Dell's decades-long run as one of the world's largest publicly traded PC makers.

If the deal goes through, it will top Avago Technologies $37bn offer for Broadcom Corp.

EMC has been struggling under pressure from activist investor and shareholder Elliott Management Corp, which wants the company to spin off its majority-owned VMware unit.

Reuters reported last week that Elliott Management plans to give EMC most of October to respond to its demands after a standstill agreement expired.

Even though EMC has made clear it will not entertain a major split, Elliott hopes the additional time will give the company more room to craft a response that could avoid a bruising activist campaign.

In August, Re/code reported that EMC was contemplating a deal under which it would be acquired by VMware, which has a market capitalization of about $35 billion.

In September 2014, the Wall Street Journal reported that EMC was exploring options and had held talks with Dell and HP.

Reuters

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