Reuters has reported that a merger negotiation between Hewlett-Packard Co and EMC Corp has broken down. This follows protracted negotiations that ultimately proved to be fruitless for both.
The breakdown is seen as a direct disappointment to investors such as Elliott Management which has been pushing hard for the merger of the two of the largest tech firms owns 2.5 of EMC.
EMC is a major manufacturer of storage products worldwide. It is expected that the investors may press for a spinoff company which again was in Elliot’s mind for some time.
The pressure on EMC to make changes has been immense considering that major rivals such as eBay Inc and Symantec have already unlocked plans that eventually will lead to raising stock values for shareholders and provide the agility to capitalise on faster-growing businesses.
The reason for the talks breaking down is not clear because most of it happened in private. Even as late as last week executives on both sides were trying to iron out the differences. The two have been bargaining hard for over one month. Price could have been the main cause it is evident, say some people. Both companies have refrained from going public on this issue.
Even as talks were going on HP had plans for a breakup – Hewlett-Packard Enterprises for software and HP Inc for the manufacturer of printers.
