HP and EMC end talks over price niggles - reports

Duo fails to strike a deal after months of 'fruitless negotiations'

The potential mega-merger between HP and EMC is off, according to people close to the firms, after the pair failed to agree on price.

The sources told Reuters that the months of fruitless negotiations have now ended but that execs were still trying to cobble together a deal as recently as last week.

Neither firm has even acknowledged the rumours that they were considering a marriage, but beady-eyed market watchers took some recent HP investor updates as a clue to what was going on.

Reuters reported yesterday that HP temporarily suspended a stock buy-back programme because it was "in possession of material non-public information", which when pressed, suggested it relates to a possible acquisition.

But as TechMarketView noted this morning on its Hot Views blog, the wheels began turning again on the share buy-back scheme. HP said in its announcement that it is "no longer in possession" of the information which first led it to halt proceedings.

TechMarketView research director Kate Hanaghan said the merger could have caused huge upheaval for HP, which last week announced it was splitting itself in two.

"Following the news of HP's proposed split, we wondered whether rumoured talks might be resurrected – given that an HP enterprise business without a PC/printer component was likely to make more sense [and] be more appealing to EMC shareholders," she said.

"However, just imagine the internal turmoil HP would have faced. Not only would it have the distraction of trying to create HP Inc and HP Enterprise, but it would also have had to negotiate a way to make HP and EMC an elegant entity amounting to more than the sum of its parts. Our fear was always that a combined business would have been big, but far from perfectly formed for today's market."