Dell Inc. is in advanced talks to buy EMC, said people briefed on the matter, potentially uniting two stalwarts of the technology industry as each faces pressure to revive its business prospects.
A deal would involve mostly cash, some of these people said. An agreement could be reached within a week, although the sources also cautioned that talks were continuing and might fall apart.
A takeover of EMC would answer years of questions about the fate of the 36-year-old company, which has grown from data storage into a collection of businesses, including network security and content management for corporate clients.
Critics have contended that EMC’s vaunted “federation” business model has produced little benefit for shareholders in recent years, with some investors calling for a breakup. Such demands have been largely rebuffed by EMC’s longtime chairman and chief executive, Joseph M. Tucci, who is 67.
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EMC’s core storage business, meanwhile, has faced pressure from rivals, including the likes of Pure Storage, a 6-year-old company that went public Wednesday.
Much of EMC’s value, moreover, comes from its 80 percent ownership of VMware, which makes so-called virtualization software, used to make efficient computing systems.
EMC had a total enterprise value of about $50.8 billion, according to data from Standard & Poor’s Capital IQ. Its stock price has fallen 12.7 percent so far this year.
EMC had previously held merger discussions with Hewlett-Packard, although those talks fell apart.
A deal by Dell would come two years after the computer giant was taken private by its founder, Michael S. Dell, and the investment firm Silver Lake.