EMC is looking to promote part of Its enterprise to Dell

Storage enormous EMC approached Dell about promoting a element of its facts storage company inside the ultimate six weeks, sources universal with the stream tell Re/code. It’s doubtful even if Dell engaged in significant discussions with EMC on a possible deal or its monetary terms. That differs from a Wall street Journal record Wednesday night announcing Dell could even be in talks for a takeover of all of EMC, which might make it the biggest tech industry merger of the past decade.

EMC is specially trying to promote its VNX statistics storage enterprise, based on sources, part of its $sixteen.5 billion information storage division. The company doesn’t get away earnings figures for either product line, but sources regularly occurring with the enterprise peg its annual sales at about $three billion. EMC and Dell declined to comment.

buying a smaller unit of EMC would make extra logical — and monetary — experience for Dell than buying all of EMC, which has a market price of $50 billion. Dell, which went private in a $25 billion buyout two years ago, also holds debt of about $12 billion, and it would ought to elevate a considerable volume greater debt to buy EMC outright. additionally, EMC’s VNX facts storage company more suitable suits into Dell’s latest method to build up its enterprise IT division.
In 2010, Dell misplaced a takeover bid for storage enterprise 3PAR to Hewlett-Packard, which paid $2.four billion. Dell went on to purchase storage enterprise Compellent in late 2010 for $960 million.

whereas Dell already has storage features, VNX would supply it entry into the bigger-end element of the company, permitting it to serve bigger companies. It’s additionally no longer considered as strategically critical to EMC, which is banking on a distinct storage know-how, flash reminiscence chips, also referred to as solid-state drives.

EMC has been beneath drive from activist investor Elliott management, which owns 2 % of EMC, to spin off its majority stake in the utility business VMware as a way to unencumber value for shareholders. EMC owns about eighty % of VMware shares, and the remainder trades publicly. EMC has resisted the drive. And remaining week, EMC’s David Goulden argued in an interview at Code/enterprise: new york that breaking up the EMC federation is “the wrong thing to do.”
The business has studied a number of strategic options. One option that had been considered during the final two months worried a buyout of EMC by way of VMware in an unusual transaction referred to as a downstream merger. With a standstill contract between EMC and Elliott expired, and the market anticipating a quarterly record later this month, power through Elliott to make a significant alternate will simplest grow.