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EMC and HP were reportedly in merger talks for a year

The deal fell apart, but the combined company would have been worth $130 billion

Financial trends and news by Steven Loeb
September 22, 2014
Short URL: http://vator.tv/n/3942

We all apparently just came THISCLOSE to seeing one of the most massive mergers in our lifetime. It would have been absolutely huge. Alas, it simply was not to be.

Data storage company EMC had been holding talks with Hewlett Packard for the two companies to combine resources, according to a report out from the Wall Street Journal on Sunday. The talks had been going on for an entire year.

If the two companies had gone accepted a deal, and been allowed to go through with it, the combined company would have been worth roughly $130 billion. The deal would have been an an all-stock transaction and would have been billed as "a merger of equals." 

It also would have made Meg Whitman  the most powerful woman in tech, as she would have remained CEO of the company.

Despite the length of the talks, the deal fell apart just in the last few weeks, as both companies became fearful that their shareholders would reject it. VatorNews  reached to both EMC and HP but neither company would comment on the report. 

While talks between EMC and HP are not likely to start up again, that does not mean that EMC is off the market. Quite the contrary, actually; it has a number of high profile suitors, with Cisco and Oracle both being named as possible parters.

EMC has also been talking to Dell, according to the journal, but that might only involve a purchase of the company's core assets, and not a full takeover. 

So why is the company is so eager to sell? Well, first there is the impending retirement of its long-time CEO Joe Tucci, who has been at the helm since 2001. He is expected to step down in February of the coming year. 

EMC is also apparently getting pressure from one of its stakeholders, Elliott Management Corp., who own 2% of the company, to break up in order to ignite its shares.

The company consists of three businesses: EMC Information Infrastructure, virtualization service VMware, and software-development company Pivotal. EMC owns a roughly 80% stake in VMware, which is a publically traded company, but Elliott Management wants EMC to separate itself from the companty. EMC, meanwhile, apparently has no plans to sell it stake  in VMware. 

EMC is currently trading at $29.53 a share. It fell .64%, or 19 cents, in trading on Friday. Meanwhile, VMWare is trading at more than three times that, closing trading on Friday down 2.28%, or $2.20 a share to $94.14.

(Image source: ekantipur.com)