Report: Fujitsu to sell storage business to Western Digital

Fujitsu is reportedly interested in selling its unprofitable hard disk drive business to Western Digital, Fujitsu executives said recently.  The deal would be worth $660 million to $944 million, according to the Nikkei Economic Daily. 

Shares of Fujitsu stock increased more than 7 percent after the unconfirmed news was published last week.  In the fiscal year ending in March, Fujitsu lost $47.29 million in an increasingly competitive HDD market currently dominated by Seagate and Western Digital.

"We are exploring various possibilities for our HDD business," Fujitsu spokespeople said.

But the company later denied it is close to a deal with WD, but did not confirm nor deny if the division is for sale.  "There is no truth at this time to the Nikkei report concerning our hard drive business."

The deal could be finalized before the end of the year. 

If true, the acquisition would better position WD to compete with Seagate, which remains the HDD leader.

The traditional HDD market is facing increased pressure due to intense price competition and growing popularity of solid-state drives (SSDs).  Although common in MP3 players and digital cameras, SSDs have made their way to select laptop brands, and will likely continue its merger to PCs and notebooks as prices drop.  The deep price cuts made No. 3 Hitachi consider selling a stake in its struggling HDD unit, but elected not to after releasing new products.

Fujitsu pulled out of the desktop hard drive market in 2001 after selling an off-shore location to Western Digital, in an effort to focus on enterprise and notebook HDDs.

The Japanese-based company also plans to off spin two overseas factories in the Philippines and Thailand along with at least one domestic plant.