Dell on verge of EMC deal - report

Mega merger could be worth $50bn according to The Wall Street Journal

Dell is in talks to take over storage behemoth EMC in a deal that could be worth $50bn (£32.6bn), according to The Wall Street Journal.

Citing people familiar with the matter, the report said the deal could be completed within the week and could mean VMware would be spun off.

EMC has been under pressure to spin off VMware and break up the federation from activist investor Elliot Management and it has been given a deadline of 21 October to decide the future of the company, according to Reuters.

This is not the first time a rumour about a Dell takeover of EMC has surfaced, with The Wall Street Journal reporting last September that the pair held talks. And speculation of other tech giants making a move for EMC has also appeared, with an analyst tipping HP to buy EMC in June, Barron's reported.

Dan Hayden-Hammond, sales director at Viadex, a partner of both EMC and Dell, said the move would be positive.

"I think any consolidation in the industry is going to be a good move," he said. "Because in the last 12 months we have seen a huge shift towards consolidated services, and when I say consolidated services I mean people who aren't just focused on infrastructure anymore.

"It really is about how you provide everything to that end-user that takes away the pain from infrastructure, applications to platforms. For Dell to buy EMC, it would add a lot to their portfolio."

For the three months to 30 June, EMC's net profit was down 17 per cent year on year at $519m, on sales which were up two per cent at $6bn, over the same period.

EMC was unavailable for comment and a representative from Dell said the company does not comment on rumours.