EMC Rumors Change But Won’t Die (EMC, CSCO, ORCL, VMW)

Ellison has consolidated just about every enterprise player out there and it has gone more and more into hardware now with the hopes of more and better one-stop integration.  It now has Sun Microsystems on top of its other merger empire.

For starters, EMC has a market cap of $43 billion its own.  This remote possibility of a merger would also leave a real question about the fate of the VMware Inc. (NYSE: VMW) super-majority stake that is held by EMC.  With Oracle’s virtualization efforts already at hand, this is a wild card that would confuse yours truly over what it would mean for the virtualization efforts that have already been seen.  VMware’s market cap is now $33 billion on its own, and we generally tally up EMC as owning 80% of that.

What would it take to acquire EMC on the surface?  At $43 billion, EMC won’t accept an at-the-money acquisition.  Does $50 billion get it done?  EMC would only be getting a 16% premium if so.

If anyone can integrate a company like EMC, Larry Ellison has a track record that is largely unrivaled.  The problem is that the same is true about Cisco Systems and John Chambers.  We have not heard this but both could easily have the nickname “Pac-Man” on their shirts.

EMC is also a company which traditionally has not been prey.  The company has made acquisitions.  Between Cisco and Oracle, there have to have been a few hundred companies acquired.  Some had products, some just owned technology.  Making a $50 billion integration would be no piece of cake for either one of these companies to do.  Still, we are finding out that anything is possible.

JON C.  OGG