Tax concerns could derail Dell’s purchase of EMC, report says

Joe Tucci and Michael Dell.
Joe Tucci and Michael Dell.

Dell’s planned $67 billion purchase of the Hopkinton data-storage company EMC could be scuttled or complicated because of up to $9 billion in unexpected taxes, according to the tech news site Re/code.

Dell insiders are reportedly concerned that regulators could make an unfavorable tax ruling on the “tracking shares” that Dell plans to create for EMC subsidiary VMware, which is publicly traded. Re/code said provisions buried deep within the companies’ merger agreement could result in the deal being called off if that happened.

Shares of the EMC dropped about 2 percent in the 11 minutes after the article was published, but quickly recovered about half that drop. Dell is privately held.