Toshiba Corp. said it would buy Fujitsu Ltd.'s loss-making hard disk drive business in a bid to take market share from bigger rivals and survive price falls.

Toshiba, which faces heavy debts and mounting losses on its chip business, has not agreed on a price for Fujitsu's hard drive operations.

Fujitsu's hard drive business is expected to post an operating loss of 25 billion yen ($270.7 million) in the year to March.

Fujitsu will now write down an additional 30 billion yen in special losses on its hard drives, dragging down its group net outlook to a 50 billion yen loss in the year to March, instead of the 20 billion yen loss it had previously forecast.

The deal, which both sides hope to close in April-June, will give Toshiba Fujitsu's estimated 16 percent market share in the enterprise drive market, dominated by Seagate Technology.

Fujitsu, whose hard drive business is expected to post sales of 240 billion yen this year, said it would also sell its hard drive media business to Showa Denko KK.

The sale price will be decided in March for sale by June, Fujitsu said.

Toshiba will take on Fujitsu's 8,000 employees at its hard drive operations, while Showa Denko will take on Fujitsu's 360 workers involved in its hard drive media business at subsidiary Yamagata Fujitsu.

By: DocMemory
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