EMC spent almost a year discussing a merger with Hewlett-Packard and is weighing its options in light of the expected retirement of CEO Joe Tucci and shareholder discontent, according to a report in the Wall Street Journal.
The merger talks with HP ended not long ago after disagreement on financial terms, along with worry that shareholders wouldn’t want the deal, and it’s not clear discussions will resume, the Journal said late Sunday in its report, citing “people familiar with the matter.”
If the pact with HP had gone through, it would have been done as a “merger of equals,” with Tucci serving as chairman and HP CEO Meg Whitman continuing that role at the head of the combined company, according to the Journal.
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An EMC and HP merger would be the largest deal in the tech sector in recent memory, given the companies’ combined market capitalization of nearly US$130 billion. Such a merger might also face heavy scrutiny from antitrust regulators both in the U.S. and abroad.
EMC has also spoken with Dell, although a deal with that company might amount to a partial divestiture, rather than Dell taking over EMC in full, the Journal said.
“EMC, consistent with long-standing policy, does not comment on rumor or speculation,” a spokeswoman said of the WSJ report via email on Monday.
Dell and HP couldn’t immediately be reached for comment.
Hedge fund Elliott Management took a sizable stake in EMC earlier this year and has been pressuring the company’s leadership to make changes, reportedly including a spinoff of its VMware division, of which EMC is a majority owner. EMC has a federated corporate structure, which also includes its storage business and Pivotal, which offers big data technologies.
EMC reported $5.9 billion in revenue for the quarter ended June 30, a 5 percent rise year-over-year. Its stock price got a slight bump to $30.25 in pre-market trading following the WSJ report, but has since fell back to $29.53.