The OEM was still looking to merge with EMC even after splitting into two new companies.
BostInno reported on how the merger talks “seem to have ended” between HP and cloud technology company EMC, “probably over the price” of such a deal, with Reuters confirming that “executives from the two companies were still trying to hammer to a deal as recently as last week, but talks bogged down on price and are now dead”.
The news site noted that the price being a sticking point “was no surprise”, as the previous announcement that the two companies were looking to merge late last month mentioned a “price impasse” that halted negotiations. The interesting aspect of the developments is that negotiations “apparently resumed” after HP announced its plans to split into two companies, which The Recycler reported on here.
HP reported it will split its PC and printing businesses into HP Inc., whilst its software and services offerings will form Hewlett-Packard Enterprise, but the previous talks between it and EMC had seen it plan to spin off its PC and printing businesses in the merger, so it can be seen that the split would not have affected any potential merger.
Joseph Wittine of Longbow Research added that “an EMC valuation of $33 to $34 (€25 to €26)” would “get the deal done” between the two companies, with EMC’s stock worth $27 (€21) earlier this week, but BostInno stated that a “generous premium may have caused” HP CEO Meg Whitman to turn down the deal “considering all of the other benefits EMC would gain” in comparison to what HP would.