A deal could be an option for EMC, under pressure from activist investor Elliott Management Corp to spin off majority-owned VMware.
The terms being discussed were not known, but if the deal goes through it would top Avago Technologies’ $37bn (€32.79bn) offer for Broadcom. EMC has a market value of about €44.31bn.
Both Dell and EMC have major operations in Ireland and employ more than 5,000 people between them.
Despite cutting 1,900 jobs at its Limerick plant in 2009, Dell remains a major employer here.
Some 2,300 staff are on the books of the computer giant at its campuses in Dublin, Cork, and Limerick.
In April, the company announced 100 engineering roles were to be created as part of its innovation technology team in Limerick.
Since establishing a presence in Cork in 1988, the company’s first manufacturing facility outside of North America, EMC has become one of the biggest multinationals in the region with 3,000 staff employed at its Centre of Excellence in Ovens, Co Cork.
Dell is also in talks with banks to finance an all-cash offer for EMC, the person told Reuters on condition of anonymity as the talks were confidential.
Dell spokesman David Flink and EMC spokesman Dave Farmer declined to comment.
A deal could further strengthen Dell’s presence among corporate clients at a time when founder Michael Dell has been trying to transform the company he founded in 1984 into a complete provider of enterprise computing services such as Hewlett-Packard Co and IBM.
The talks come two years after Michael Dell and private-equity firm Silver Lake took Dell private for $24.9bn, ending its decades-long run as one of the world’s largest publicly traded PC makers.
Elliott, which has been pressuring EMC to spin off VMware, agreed in January to refrain from agitating against EMC for eight months in exchange for two directors backed by Elliott.
Reuters reported last week that Elliott plans to give EMC most of October to respond to its demands after the standstill agreement expired, hoping the extra time would give EMC more room to craft a response to avoid an activist campaign.
“Of all the options potentially on the table, we would view a merger with the now-private Dell as a nightmare scenario that would lack strategic synergies and further complicate EMC’s troubled growth path,” said FBR Capital Markets analyst Daniel Ives.
While a deal would make a “tonne of sense” for Dell, EMC/VMware holders would prefer a breakup of the antiquated federated model and split, he said in a note. EMC’s so-called “federated business model” comprises its main data-storage unit, enterprise security business RSA, cloud-computing software maker Pivotal and VMware.
In August, Re/code reported that EMC was contemplating a takeover by VMware. The Wall Street Journal reported last year that EMC was exploring options and had held talks with Dell and HP.