Toshiba to buy Fujitsu HDD division

February 18, 2009 | 09:55

Tags: #25 #enterprise #hard-drive #hdd #merger #purchase #ssd #takeover

Companies: #fujitsu #toshiba

Toshiba is to bolster its storage division with the purchase of Fujitsu's hard drive operations according to reports.

As reported over on The Register yesterday, Toshiba has agreed to purchase rival Fujitsu's hard drive division in a staged takeover. Although the move is thought to be a way for Toshiba to enhance its 2.5” and smaller drive offerings, the deal will also move the company into the enterprise storage sector – a part of the market in which Toshiba has no prior presence.

According to a memorandum of understanding signed by both organisations, the takeover will be a staged process: firstly, Fujitsu will spin its hard drive operations into a separate company; Toshiba will buy an 80 percent share of the newly-formed business; and after an unspecified period designed to smooth the transition between owners Fujitsu will relinquish its final 20 percent share to Toshiba.

Toshiba will be taking over all design, development, manufacturing, and sales of hard drive technologies currently carried out by Fujitsu – but what the company describes as its “HDD head and media business” will not be included as part of the deal, being instead earmarked for sale to manufacturing group Showa Denko K.K.

The good news for Fujitsu employees is that jobs are not expected to be affected by the takeover, with some 8,000 positions being transferred to the to-be-formed spin-off company – and from there to Toshiba.

The purchase will take Toshiba to fourth place in the hard drive market, bumping rival Samsung down to fifth – and accounting for some 16 percent of global hard drive sales, with Toshiba announcing plans to hit 20 percent by 2015. The deal is expected to be completed by the end of June this year.

Has Fujitsu made a mistake in selling out to Toshiba, or is the deal exactly what Toshiba needs to compete with bigger rivals like Western Digital and Seagate? Share your thoughts over in the forums.
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