EMC looking at sale of VMware stake

EMC, the maker of storage computers, facing the retirement of chief executive Joseph Tucci and activist pressure, is exploring strategic options that could include a full or partial sale, or a spinoff of VMware Inc.

EMC looking at sale of VMware stake

The Hopkinton, Massachusetts- based company has contacted firms including Oracle Corp, Cisco Systems Inc and Hewlett-Packard Co about selling itself, said sources who asked not to be identified.

EMC has also discussed a deal for its storage business with Dell Inc, they said.

No deal is imminent and a sale or spinoff may not result, the sources said.

EMC began holding a strategic review in the spring as Tucci, who has been CEO since 2001, is set to step down from that role some time before February, according to the terms of his employment agreement.

More recently, the company has faced pressure from activist investor Elliott Management Corp, which has amassed a stake of more than $1bn in EMC.

Elliott is pushing EMC to sell itself or spin-off software maker VMware, where it is the majority owner.

Dave Farmer, a spokesman for EMC, declined to comment, as did Kate Holderness, a spokeswoman for Hewlett-Packard; Deborah Hellinger, a spokeswoman for Oracle; and David Frink, a spokesman for Dell.

John Earnhardt, a spokesman for Cisco, didn’t immediately respond to a call for comment.

EMC’s talks with Hewlett-Packard and Dell were reported earlier by the Wall Street Journal.

Acquisition discussions between EMC and Hewlett-Packard were advanced and included a decision to have Hewlett-Packard chief Meg Whitman serve as CEO and Tucci as chairman, but there were disagreements over price and the next layer of management, said one of the people.

An outright sale of VMware would probably trigger a tax bill, making a spin-off a more attractive option, said one of the people familiar with the process.

More in this section

Budget 2022 Logo

What impact will this  year's budget have on you and your business.

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up