PC maker Dell in merger talks with storage major EMC

IT deals
PC maker Dell and enterprise storage major EMC are in talks for a merger, The Wall Street Journal reports.

The report does not say whether this would be a full merger or if Dell would just buy parts of EMC’s business. EMC has been looking for a major restructuring of its business.

EMC makes software and hardware for storage products used in high-efficiency data centers. It also owns VMware.
Dell is the world’s third-largest maker of personal computers.

Meanwhile, Reuters reports that Dell, which is in talks to buy data storage company EMC, is talking to banks to finance an all-cash offer for the Hopkinton, Massachusetts-based company.

A deal could 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 HP and IBM. IDC report said Dell is the third largest PC vendor in the second quarter after Lenovo and HP.

EMC reportedly began a strategic review to explore various options last year. EMC aims to cut $850 million in expenses and there are indications that there can be elimination in jobs.

The enterprise storage major has faced competition from big cloud-computing platforms such as Amazon, Google, and Microsoft. Free software like Hadoop has reduced the need for EMC’s expensive data-processing solutions, given that they can run on commodity hardware.

EMC CEO Joe Tucci did not retire in February 2015 though the company announced its plans to look for a new CEO. A merger with Dell will assist EMC to find a new CEO for EMC.

Media reports said EMC is facing pressure from activist investor Elliott Management to divest various IT businesses, including VMware that makes virtualization software for servers.

EMC has a market cap of $50 billion. If Dell, which is not listed, is targeting to purchase EMC, the takeover could be the biggest-ever technology buyout, trumping this year’s pending $37 billion Avago Technologies buy of Broadcom.

Baburajan K
[email protected]

  • SP

    ‘EMC aims to cut $850 in expenses’. Looks like they are cutting down on few Coffee machines in office 🙂