15-10-2014, 20:42 #1
[EN] Fusão da HP com a EMC pode não acontecerPeople briefed on the matter have said HP had been in talks to merge with EMC for months, which would have led to the creation of a big new technology titan. Still, the negotiations were difficult and halted several times over a number of issues, including price.
Reuters reported earlier on Wednesday that talks between the two companies had taken place as recently as last week, but that the discussions were definitively over.
Representatives for HP and EMC declined to comment.
That does not mean deal-making has been ruled out in the future for either of the technology giants. HP announced last week that it planned to split itself into two public companies, one focused on services for corporate customers and the other on printers and personal computers.
And EMC has faced strong pressure from Elliott Management, the activist hedge fund run by Paul E. Singer that owns about 2.2 percent of its shares. In a letter last week, Elliott formally demanded that EMC break itself apart to improve returns to shareholders.
A large factor behind that demand is a desire to have EMC spin off its 80 percent stake in VMware, the hugely successful virtualization software company with a market value of $37.5 billion. That means EMC’s stake in VMware alone makes up a majority of its $54 billion market capitalization.
Elliott has called for a tax-free spinoff of VMware, giving EMC money to finance a stock buyback of its own. But the hedge fund also suggested that other elements of EMC’s “federation” of businesses could be broken up in other ways, including bundling the company’s core storage operations together with its RSA security business into a unit that could eventually be acquired by the likes of Cisco.
EMC has acknowledged Elliott’s demands but has not yet decided on a course of action.
15-10-2014, 20:45 #2
Tech firms HP, EMC call off merger talksBy Nadia Damouni
NEW YORK Wed Oct 15, 2014
Hewlett-Packard Co has ended merger talks with EMC Corp and may announce this development as soon as Wednesday, deciding to walk away after months of fruitless negotiations, people briefed on the matter told Reuters.
The official cessation of discussions to merge two of the tech industry's largest enterprise-oriented firms may come as a disappointment to activist investors Elliott Management, which has pushed hard for storage products maker EMC to pursue merger or spinoff opportunities.
Pressure is building on EMC as rival technology companies, such as eBay Inc and Symantec, begin spinning off operations in an attempt to unlock shareholder value, become more agile, and capitalize on faster-growing businesses.
It is unclear when talks ended following months-long discussions, the people said on condition of anonymity because the talks were private.
Executives from the two companies were still trying to hammer out a deal as recently as last week, but talks bogged down on price and are now dead, the people said.
HP has temporarily suspended its stock buyback program ahead of its Nov. 25 earnings because the company said it is in possession of material non-public information. When pressed by stock analysts, Chief Financial Officer Cathie Lesjak noted on a conference call that the non-public information pertains to a possible acquisition.
HP and EMC declined to comment on Tuesday.
It is also unclear what specifically was discussed. A straight-up merger of the two companies would have created one of the industry's largest providers of data storage, and created a computing giant with deep penetration in the business of providing computing hardware and services to corporations.
Elliot Management, which owns 2.2 percent of EMC, has been vocal about wanting EMC to merge or spin off some of its assets, such as software subsidiary VMWare. But EMC has publicly said it plans to keep its company together.
HP is now engaged in a breakup of its own, which analysts say should discourage merger thoughts.
HP has said it will split into Hewlett-Packard Enterprises, a tech infrastructure, software and services business, and HP Inc, a leading player in the slow-growing PC and printer markets.
15-10-2014, 22:10 #3
HP, EMC Reportedly Break Off Merger Talks
Try as they might, Hewlett-Packard and EMC apparently couldn't fit the pieces together for a monumental merger of two of the largest and most successful old-line IT companies in the world.
The opportunity had seemed ripe for such a megadeal because HP, which is renaming its enterprise software/services business Hewlett-Packard Enterprise, is breaking off its PC and printer businesses into a separate company called HP Inc. The match-up of Hewlett-Packard Enterprise servers, services and storage to go with EMC's core storage hardware and software business was seen by some key decision-makers as a golden opportunity to create a powerful new IT provider.
The idea of the merger ostensibly was to synergize two historically successful companies that both required a jolt of energy and also a need to enter new markets to keep that growth coming. On the surface, the idea appeared interesting for a number of reasons, and the companies apparently came close to actually doing it a few months ago.
But the deal fell through, largely because both firms didn't think their shareholders would ultimately approve it. As it turned out, the item was never entered onto a board agenda for either company.
Activist EMC investor Elliott Management had been very public in pushing the storage giant to do the merger with HP Enterprise or spin off one or more of its other properties. EMC also holds majority ownership in VMware, RSA Security, Pivotal and Cloudscaling.
EMC Weighs Merger, Other Options
Another company that has recently held talks with EMC is Dell Inc., people familiar with the matter said. It isn't clear where any talks between the two companies stand. Given their relative sizes, it is unlikely Dell would contemplate a full takeover of EMC, and might instead seek to purchase assets including its core storage business, one of the people said.
Other companies that analysts and others regard as potential deal partners for part or all of EMC include Cisco Systems Inc. and Oracle Corp. It is possible none of the alternatives EMC is contemplating will bear fruit.
J.P. Morgan Chase & Co. is advising EMC on its options, according to people familiar with the matter.
EMC, a pioneer in building big, complex systems for storing large amounts of data, is approaching a strategic crossroads. Mr. Tucci, who has been CEO since 2001, is expected to step down around February 2015, though he has put off previous retirement dates.
Meanwhile, hedge fund Elliott Management Corp. has taken a big stake in the company and urged it to break up to ignite its shares.
The deal EMC and Hewlett-Packard discussed would have been a blockbuster, in part given that the two companies have a combined market value of nearly $130 billion. The deal they contemplated would have been an all-stock transaction billed as a merger of equals, one person familiar with the matter said.
Mr. Tucci initially would have been chairman and HP's Meg Whitman would have remained CEO of the combined enterprise.
A merger of HP and EMC, based in Hopkinton, Mass., would create a powerhouse provider of gear that companies use to manage data. It would shake up the roughly $2 trillion-a-year business market for hardware, software, and technology services, given what significant players both companies are in the industry.