By Jonathan Vanian
October 7, 2015

EMC is exploring a possible merger with Dell, the Wall Street Journal reported on Wednesday.

As of now, it is unclear whether Dell is looking to acquire all of EMC (EMC) or parts of the company, and the report states that the talks could collapse.

EMC operates under what it calls the EMC Federation, a collection of five independent companies, including EMC’s storage business, virtualization company VMware, security firm RSA Systems and cloud and big data software company Pivotal.

The storage giant has been under intense pressure from hedge fund Elliott Management to break apart the federation. EMC’s storage business, although generating the bulk of EMC’s total revenue, has been essentially flat this year. It has high margins, but not as high as VMware’s and doesn’t have the growth potential of Pivotal.

A temporary truce between Elliott Management and EMC ended in September, leaving many analysts to wonder what would become of the technology giant.

At Fortune’s Brainstorm tech event in June, Silver Lake Partners managing partner Egon Durban, one of Dell’s board members, said Dell was examining EMC’s federation structure and the idea that Dell could possibly spin out or combine some of its business units.

“I think what [EMC CEO Joe] Tucci has done with VMware is a good example of that, where you can take something that people don’t fully understand, buried in the portfolio, and unlock it while still having a partnership with the mothership,” said Durban.

In 2013, Dell became a private company in a deal led by Silver Lake that was valued at $24.9 billion.

EMC currently has a market cap of nearly $50 billion. The company’s shares rose 8% in after-hours trading after the report of the possible merger.

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