Might Cisco (CSCO) and EMC (EMC) Look to Merge, or Simply Stay Friends With Benefits?
More News related to CSCO
- Notable Mergers and Acquisitions of the Day for 11/27: F, S/IPCS, STAR/CSCO, HRAY
- Starent Networks (STAR) To Settle Shareholder Class Action Suit In Connection With Proposed Merger with Cisco (CSCO)
- Malaysian Students Rule Cisco's Asia Pacific Skills Competition
- Skymark Research Initiates Independent Research Coverage on Cisco
- Enter the Cisco 'Christmas Connections' Contest in Australia and New Zealand
More News related to EMC
- Notable 52-Week High's and Low's: BMY, JCG, PBR, SLW, GOOG, INCY, NTAP, QADI, GOLD, BONT Higher; SPWRB Low
- Notable Analyst Ratings Changes 11/25: EXXI, IWA, VPRT Upgraded; BNHN, NRG, GTE Downgraded
- UBS Starts EMC Corp (EMC) at Buy
- EMC (EMC) Reaffirms Q4, FY09 Non-GAAP Guidance, But Lowers GAAP Outlook
- Fi-Tek Selects RSA to Help Meet Multi-Factor Authentication Compliance Requirements
More News related to VMW
- NetApp (NTAP) and Cisco (CSCO) OK, CEO Remarks -DJ
- VMware to Present at the Credit Suisse First Boston Technology Conference
- Griffin's Blue Ridge Likes A Major Bank, Swaps Into Gold Miner ETF, Picks Up More Silver and Makes Moves In Tech
- IBM, VMware and NSEC Partner to Simplify Computing on the Go
- VMware Expands Industry-Leading VMware Ready(TM) Program to Include Application Software
After the announcement of Cisco (NASDAQ: CSCO) and EMC (NYSE: EMC) to form a joint venture, dubbed Acadia, one wonder's whether or not the duo might be heading for M&A city, a Barron's article reported today.
The deal, which was announced last week, allows Acadia to become a security, storage, virtualization and networking one-stop shop. The joint venture also includes VMWare (NYSE: VMW), of which EMC has 98% voting control.
However, an analyst at Jefferies states that a merger is unlikely because Cisco doesn't have to at this point. If the joint venture were to not pan out, then Cisco might consider a bid for EMC.
The article also notes that Cisco may not have to buy EMC to keep it out of the hands of rivals IBM and Hewlett-Packard. IBM is EMC's mortal enemy, and HP already has storage offerings in categories occupied by EMC.
VMWare, a subsidiary of EMC, would also make the merger more expensive. VMWare is trading at about 38x FY10 EPS, about $41, and currently has a $16.5 billion market cap. The reason for the valuation is that VMWare is such a pure-play in virtualization, and investors like pure plays.
Related Categories
General NewsRumors
Stocks Mentioned
+0.00Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
