Dell Inc. is trying to create a computing behemoth just as cracks are appearing in the debt markets that it would need to finance the deal.
The personal-computer maker is talking to banks about raising at least $40 billion to finance the purchase of EMC Corp. as the two companies battle flagging demand, according to people with knowledge of the matter. That could be a tricky proposition for the junk-rated Dell.
“The idea of $40 billion in financing will put Wall Street’s creativity to the test,” said Margie Patel, a fixed-income money manager for Wells Capital Management in Boston, which oversees $351 billion.
EMC and Dell both need ways to manage a slump in their main businesses. Though the combination would be costly and difficult to finance, it would create a computing colossus that combines EMC’s leadership in digital storage with Dell’s share of the market for servers, which help businesses tackle mammoth computing tasks.
The enlarged business could also gain access to VMware, in which EMC has a controlling stake. Its valuable software is used to more efficiently manage server-laden data centers.
Hopkinton, Mass.-based EMC has more than 300 employees in the Denver metro area.
