Media reports have said US PC maker Dell is about to take over data storage giant EMC. The merger would mean the largest transaction ever in the tech sector, with EMC market capitalization standing at over $50 billion.
Bloomberg and Reuters reported Dell could announce a deal to take over EMC as early as Monday.
They said EMC would be valued in the region of $33 (29 euros) per share, with $25 per share to be paid in cash and the rest to go to shareholders through a special stock tracking the market value of EMC’s virtualization software VMware.
With EMC having a market capitalization of $53.6 billion, the takeover would be the biggest ever in the technology sector.
Higher profit margins
The takeover would help Dell diversify its operations, away from a rather stagnant PC market towards attacking the faster-growing and much more lucrative segment for managing and storing data for businesses.
Media reports said EMC had asked for a special rider to be included in the merger which would allow it to solicit bids from other parties and pay a discounted breakup fee for Dell, if a deal with another company came about.
Potential rival suitors could be IBM, Cisco Systems and Hewlett-Packard, but the chances of them actually making a separate bid have widely been regarded as slim because of the huge transaction sum involved.
hg/cjc (Reuters, dpa)