Manufacturing & Supply Chain

Dell, the world’s third-biggest personal computer maker, is understood to be in talks to combine with all or part of computer data storage giant EMC. A takeover offer would cost Dell around $50bn.

Over 5,300 people are employed by the two companies in Ireland at major sites in Dublin, Cork and Limerick, with another 700 at EMC-linked VMare in Cork. It is not yet known what effect, if any, the possible merger would have on the companies’ Irish operations.

A spokeswoman for EMC Ireland said the firm has over 3,000 employees in the country, including a team of 50 salespeople in Dublin but the rest are employed at the company’s huge ‘Centre of Excellence’ in Cork.

The centre has a range of operations, including marketing, customer services and international finance. The EMC spokeswoman declined to comment on the merger talks.

A spokeswoman for Dell Ireland said that the firm “does not comment on rumour or speculation”. She said that the company employs 2,300 people between its their three campuses in Cork, Limerick and at Cherrywood in Dublin. Dell’s Irish operations are divided up into several separate entities. The Dublin and Limerick sites account for the bulk of Irish staff.

The company’s European financial services headquarters is based in Dublin while in Cork the firm has a high tech multi-lingual EMEA business and technology centre. In Limerick the company operates its EMEA solutions centre. A manufacturing business that had been based in Limerick moved to Poland in 2009. The merger talks have been sparked by EMC’s efforts to appease shareholders disappointed with returns and its efforts to replace an outgoing chief executive.

EMC shares have declined 13pc this year to yesterday, and the company has been under pressure to boost its share price from activist investor Elliott Management. EMC also needs to find a successor for CEO Joe Tucci, who was supposed to step down in February.

Dell, which was taken private in a deal worth about $25bn in 2013, has about $12bn in debt and would need about $40bn in financing to pull off the deal, according to Reuters, which said Michael Dell’s Texas-based IT giant is in talks with lenders about lining up the money.

‘The Wall Street Journal’, which first reported that Dell and private-equity firm Silver Lake are in advanced talks to buy EMC, said that EMC’s stake in VMW is a central element to the talks.

EMC owns an 80pc stake in VMWare which has been most recently valued at $34bn.

If the merger with Dell is completed, it would cement the once consumer-targeted computer company as one firmly placed to run the ICT of major corporations.

Cloud computing business VMWare employs 700 staff at its European headquarters in Ballincollig, Co Cork.

Elliott Management has urged EMC to fully spin out its VMWare unit to shareholders and re-package other top businesses to garner the acquisition interest of large technology firms. A Dell-EMC deal would be the biggest in the sector ever, topping Avago Technologies’ $37bn offer for fellow chipmaker Broadcom Corp, announced in May.

There are doubts that Dell can pull off the deal due to its level of debt and the high amount of cash it would have to fork out to buy EMC.