Dell is negotiating to purchase EMC, which has market capitalization of $50 billion.
Dell is interested in purchasing a data storage enterprise. The Texas-based company and private equity organization, Silver Lake, are in later stages of negotiations to purchase EMC Corporation, an agreement that could prove to be the largest technology industry takeover ever and get rid of queries regarding EMC that have been raised against it for more than 12 months.
Dell news affirmed that an agreement for EMC could be signed within 7 days, as disclosed by some people, though it is also likely that one would not be signed. The contract, presently being discussed, requests to sell its VMware unit. The Hopkinton-based company has been focusing on various options since the Wall Street Journal stated that it was conducting a strategic review in 2014, but it now looks to be the most probable outcome.
Dell drivers exclaimed that EMC’s stock rose by 7.8% in after-hours trading on Wednesday after the Journal shared details regarding the possible agreement. It has a market capitalization worth $50,000,000,000, and an agreement would probably be valued at around that level. Chip manufacturer Avago Technologies Ltd.’s pending $37,000,000,000 contract to purchase Broadcom Corporation is presently the biggest pure technology merger that has ever taken place.
Dell financial service reported that there has been a series of technology and other mergers in 2015, and the overall takeover volume is running at a near record speed. EMC has been pressurized to increase its share price since 2014, when activist hedge fund, Elliott Management Corp., bought a 2% share in the company and asked it to sell of VMare.
EMC currently owns 80% of VMare, which has a market worth of $34,000,000,000. It reached an agreement with hedge fund Elliott Management, by hiring two new directors to its board in January. However, experts have deliberated that whether Elliott would begin stirring for change again. Its core storage operations have been targeted by rivals, such as Pure Storage, which was publicized on Wednesday.
Purchasing EMC will not be easy for Dell enterprise, which was taken private in a $24,000,000,000 leveraged acquisition and presumed a significant amount of debt. Dell has stressed upon “converged systems” which combine networking, storage, and computing in one division. It has important assets in areas, such as information management and safety, which the PC maker could employ as part of its strategy.
It is quite likely that the recent step would enhance Dell’s image in the competitive market.