Analysts say that the Dell-EMC deal could likely result in a broader rage of storage products. (Photo : www.networkingnerd.net)
Dell has announced plans on Monday, Oct. 12, to acquire data storage giant EMC for $67 billion, pushing their combined market share to the top spot, surpassing Huawei, according to the Wall Street Journal.
Considered as the biggest tech deal in history, the takeover would help Dell in its transition from a consumer-based company to a supplier for large companies, the report said.
Alberto Moel, an analyst from Hong Kong-based Bernstein, said that EMC has strong rivals in China, but the deal is unlikely to encounter a major challenge from Chinese regulators.
Although the partnership would boost the two companies' power in China, they are still far from taking control of the market, he added.
In recent years, Chinese authorities have imposed antitrust policies, even in cases that did not involve Chinese companies. Last year, Chinese regulators blocked the planned alliance of the world's three largest container-shipping companies, despite U.S. and European regulatory approval.
In April 2013, Glencore PLC finally got Chinese approval for the acquisition of mining group Xstrata, after agreeing to sell a major copper project later bought by a Chinese-led consortium.
According to the report, the Dell-EMC deal could affect the two big players in the China tech world due to their overseas ambitions.
Lenovo Group Ltd. has entered into a joint venture with EMC for the past two years to produce data storage products for small- and medium-sized businesses. Analysts said that the Dell deal likely means curtains for Lenovo's EMC partnership.
"I expect the partnership between Lenovo and EMC will end very soon and Lenovo will have to find something else," said Kitty Fok, China head of market research firm IDC.
The report added that Huawei Technologies Co. will also face a stronger competitor as it plans to expand its enterprise business in China and overseas.
According to analysts, the combination of Dell and EMC would result in a broader range of storage products.
On the other hand, Dell and EMC will face global rivals that are all U.S. companies, such as NetApp, Hewlett-Packard and International Business Machines Corp.
