The EMC merger with Hewlett-Packard that never went through
The EMC Corporation have been in talks with Hewlett-Packard about a possible merger. However, the merger never went through because of “difficulties”.
The terms of the proposed transaction would have been a merger of equals, which would combine the two computer giants into a company with a market value of approximately $129 billion.
However, according to someone briefed on the matter, the negotiations ended weeks ago because of the difficult issues and the complexity of the transaction.
Under the proposal, the current HP CEO Meg Whitman would have become CEO of the combined entity, while EMC’s current CEO, Joe Tucci, would have assumed the role of President.
Both companies have been under increasing pressure in recent years. EMC has attracted a lot of attention recently, especially by Elliot Management (a $25 billion investment firm).
Joseph Tucci, the chairman and CEO of EMC, recently stated that he will be retiring next year – although he’s known to say things and not follow them through.
HP on the other hand has said that it plans to lay off thousands of employees and move into markets other than desktop and laptop computers.
It is not yet clear whether EMC will consider other acquisitions or mergers. Something that is not expected to happen for sometime is the sale of the company’s 80 percent stake in VMware.
VMware has a market value of around $40.5 billion, which means that EMC’s 80 percent stake in the company now accounts for a majority of its own market value.
Mr. Tucci was asked if EMC would ever consider selling off its stake in VMware, and he said that would “never” happen.