Dell discussing merger with EMC, sources say

The news of a potential combination between the companies was reported earlier by the Wall Street Journal. Dell spokesman David Flink declined to comment while EMC could not be reached for comment outside regular United States business hours. EMC owns 80% of VMware, which has a market value of $34 billion. It’s the parent company of the successful VMware.

EMC has been looking at strategic options for boosting its share price under pressure from activist investor Elliott Management Corp.

The talks would involve a merger between the computer maker and all or part of EMC, said the people, who asked not to be identified because the discussions are private.

A complete merger would combine two of just a handful of giants that are attempting to combine all the components of IT infrastructure: Computing, network, storage and virtualization. Even before the buyout, it had been increasingly positioning itself as an enterprise-oriented firm, expanding its server, storage, and security offerings in a bid to move away from the slim margins of the PC business.

Merger talks with Hewlett-Packard HPQ ahttp://www.usatoday.com/money/lookup/stocks/HPQ/nd Dell have been rumored. And over the summer, EMC vowed to cut 0 in expenses, prompting employees to start bracing themselves for mass layoffs.

EMC announced on Wednesday that it would post its third-quarter results on October. 21.

Tucci was scheduled to retire from EMC in February which did not happen, in part because there was no replacement named.

Analysts have said it would make sense for Dell, now a private company, to buy EMC’s data storage operation, the Journal reported. “But for EMC in our opinion, this would be a one plus one equals 1.5 situation”. “Merging with a Dell is not something that’s going to be loudly applauded”.