Dell, the world's third largest personal computer maker, is in talks to buy data storage company EMC, a person familiar with the matter said, in what could be one of the biggest technology deals ever.
Dell is also talking to banks to finance an all-cash offer for the Massachusetts-based company, the person told Reuters.
The terms of the negotiations were not immediately known. EMC has a market capitalisation of about $50 billion as of yesterday's close.
A potential deal could further strengthen Dell's presence among corporate clients at a time when Michael Dell has been trying to transform the company he founded in 1984 into a complete provider of enterprise computing services such as Hewlett-Packard and IBM.
The news of the deal talks comes two years after Dell was taken private for $24.9 billion by founder Michael Dell and private equity firm Silver Lake, ending Dell's decades-long run as one of the world's largest publicly traded PC makers.
If the deal goes through, it will top Avago Technologies' $37 billion offer for Broadcom.
EMC has been struggling under pressure from activist investor and shareholder Elliott Management Corp, which wants the company to spin off its majority-owned VMware unit.
Reuters reported last week that Elliott Management plans to give EMC most of October to respond to its demands after a standstill agreement expired.
Even though EMC has made clear it will not entertain a major split, Elliott hopes the additional time will give the company more room to craft a response that could avoid a bruising activist campaign.
Dell ranked third in global PC shipments in the second quarter after Lenovo Group and HP, according to research firm International Data Corp.