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EMC holds secret merger talks with HP, with Dell, Cisco and Oracle also in frame

Antony Savvas | Sept. 23, 2014
VMware parent under pressure from activist shareholders

HP and data storage specialist EMC have been having merger talks, according to a Wall Street Journal report.

EMC is under pressure to deliver more value from a shareholder activist, and is said to have held talks with HP about a proposed merger over the last year. According to insiders though, those talks have now come to an end with no deal in sight, says the WSJ report.

There is also speculation that EMC could now turn to another company with a view to a merger or to sell assets to, such as Dell, Cisco or Oracle for instance. EMC generates most of its current market capitalisation from its 80 percent stake in virtualisation software company VMware.

With its data storage solutions increasingly losing their previous market edge, as its competitors step up to the plate by bundling rival storage solutions with newer cloud, data analytics and mobile technologies, EMC is trying to keep up.

EMC is considering options that "could include a merger deal with a rival, according to people familiar with the matter", reports the WSJ. JP Morgan Chase is reportedly advising EMC on its options.

A possible EMC merger, acquisition or asset sale has been given impetus by the possible planned retirement of EMC CEO Joe Tucci next year, and pressure from activist shareholder and hedge fund Elliott Management. Elliott has taken a large share in EMC and has urged a break up of the company to get more value from its investment.


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