The OEM came close to selling off its PC and printing businesses in merger talks with cloud technology company EMC.
CRN reported on other investigations by both CNBC and the Wall Street Journal, which found that HP “considered spinning off [its] PC and printing business[es]” as part of merger discussions with EMC, a “global leader in enabling businesses and service providers to transform their operations and deliver information technology as a service”.
The two business units, which CRN states are worth a combined $56 billion (€43 billion), were considered by HP as possible spin-off sales in merger discussions with EMC, which are “no longer ongoing”, having broken down “with regard to the price of the deal”. Neither company would comment on the reports, but the Wall Street Journal had reported that EMC had been “under pressure from an activist investor” in addition to facing “the potential retirement” of CEO Joe Tucci.
As a consequence, the company had then “held merger and acquisition discussions with both HP and Dell”, but these did not come to fruition. CRN interviewed a host of anonymous CEOs and partners who work with HP to get their views, with one large enterprise partner stating that such a deal would “not [have] negatively impact[ed] his business” as HP “internally treats its enterprise business and its PC and printing businesses as two separate groups”.
The CEO added that he would “welcome a deal given that it would result in more muscle under a single vendor partner […] it would be easier for us as an HP and an EMC partner”. Another enterprise CEO saw it as a “big opportunity for the channel […] where there is change and transition, there is opportunity. Where there is chaos, there is lots of opportunity”.
Other partners interviewed meanwhile noted that they had heard a potential deal would have “included a spin-off of certain parts of the business”, with the deal “dead at this point” as “EMC wanted too much for HP”, though one added: “Could it come back alive? Oh yes.”
HP’s PC business performed strongly in its recent quarterly results, with sales up by 12 percent to $8.64 billion (€6.7 billion), though the printer business’ sales were down by four percent to $5.59 billion (€4.3 billion). CRN gave context to the potential deal, stating that a hedge fund bought a stake in EMC last year before Tucci’s plans to retire in 2015 were announced, with no successor yet named.