EMC Corporation (NYSE:EMC), an established data storage products maker, is considering merger and some other far reaching options that could include a complete sellout. The data storage company is said to have held merger talks with rivals, Dell Inc. (NASDAQ:DELL) and Hewlett-Packard Company (NYSE:HPQ).
The pressure for merger is said to be stemming from an activist shareholder, Elliott Management, and the fact that the company’s longtime CEO, Joe Tucci, has announced that he will be stepping down by next year.
JPMorgan Chase & Co (JPM) is the entity advising EMC Corporation (NYSE:EMC) on the available options.
EMC had held a series of talks with Hewlett-Packard Company (NYSE:HPQ) for the past year, but no deal was reached. On the talks with Dell Inc. (NASDAQ:DELL), it’s not yet clear what the talks will yield, though a full acquisition is said to be highly improbable. It’s also possible that Dell may only accept partial acquisition of assets to help boost its own business.
Elliott Management is also said to be pushing for EMC Corporation (NYSE:EMC) to spin-off the company’s 80% stake in the software company, VMware, Inc. (NYSE:VMW), arguing that such a move would see both stocks gain in the financial market. VMware, Inc., has been an important part of EMC with its earnings accounting for close to 22% of EMC’s total revenue of $23.2 billion last year.
EMC Corporation (NYSE:EMC) acquired the company back in 2004 for $700 million and the company has grown over the years to become quite an invaluable part of EMC.
Cisco Systems, Inc. (NASDAQ:CSCO) and Oracle Corporation (NYSE:ORCL) have also been floated as some of the companies considered as EMC’s potential partners. These companies can either go for full or part of EMC.
The company is known to produce very sophisticated storage products that are suitable the storage of large amounts of data.
This article has been written by Victor Ochieng.