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Dell Is in Talks With EMC Over Possible Merger

Dell Inc. is in talks over a combination with EMC Corp. EMC 0.58 % , according to people familiar with the matter, a deal that would remove questions about EMC’s future that have hung over the data-storage giant for more than a year.

It is unclear whether the two technology-industry heavyweights are discussing a full or partial takeover of EMC, and it is possible no deal will be reached. EMC has been considering several options since The Wall Street Journal reported it was doing a strategic review last year, and other options could still be on the table.

Shares of EMC were up 7.8% in after-hours trading Wednesday after the Journal reported on the possible deal.

There has been a wave of tech and other takeovers this year, and merger volume overall is running at a near-record pace. Still, market volatility could slow down the overall merger market and pose a threat to the EMC-Dell talks, one of the people cautioned.

EMC has been under pressure to boost its stock price since last year, when activist hedge fund Elliott Management Corp. took a roughly 2% stake in the company and urged it to spin off its VMware Inc. VMW 1.00 % unit. EMC owns 80% of VMware, which has a market value of $34 billion. An arrangement struck in January between Elliott and Hopkinton, Mass.-based EMC that had barred the fund from publicly pressuring EMC expired last month. Elliott has since stayed quiet.

Analysts have said it would make sense for Dell, which was...