Western Digital to buy Fujitsu Storage

The hard-drive world just got smaller with the news that Western Digital is looking to snap up rival Fujistu – or their storage division, at any rate.

An article on PC World yesterday claims that Fujistu is looking to leave the storage media marketplace and is hoping that Western Digital is looking to buy. If the deal goes ahead, it could leave Western Digital entering 2009 just five percent behind rival Seagate in terms of market share.

The news, taken from a report in Nikkei Business Daily, claims that the two companies are in the “latter stages of negotiations” and are looking to finalise the deal before the end of the year. The deal would include Fujitsu's manufacturing capabilities in Japan, the Philippines, and Thailand and set Western Digital back an impressive £376 million to £565 million depending on how good the company is at haggling.

Neither company has commented on what precisely has triggered Fujitsu's desire to sell, with no reports of higher-than-average failure rates or particular failed ventures preceding the news. However, with the financial markets worldwide still suffering from 'uncertain times', the cash injection could prove beneficial for the remaining aspects of the Fujitsu corporation.

It's harder to see what Western Digital would get out of the deal: despite an increase in market share, the deal leaves the company catching up to but not surpassing current market leader Seagate. Whether the company is planning to utilise the increased manufacturing capability the deal would bring to increase production and lower costs, or whether Western Digital would prefer to close down the plants and continue to use its own facilities exclusively remains to be seen. For the sake of the 15,000 employees of the facilities, I hope it's the former.

Do you wish Western Digital luck in its acquisition, or is less competition in a given market always a bad thing? Share your thoughts over in the forums.