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Toshiba inks deal to buy Fujitsu's HDD operations

http://www.tradingmarkets.com/.site/news/Stock%20News/2301264/

TOKYO, Apr 30, 2009 (Kyodo News International)

Toshiba Corp. and Fujitsu Ltd. signed a 30 billion yen deal calling for Fujitsu to fully hand over its hard disk drive business to Toshiba via a two-stage stock deal to be completed by the end of 2010, the two companies said Thursday.
Under the deal, Fujitsu's HDD-related business and functions will be transferred to Toshiba Storage Device Corp. to be set up shortly in Tokyo's Shibaura district. The new firm with a workforce of 980 engineers and other personnel will take charge of HDD design, and research and development, the two companies said.

Fujitsu's HDD-manufacturing units, Fujitsu Computer Products Corp. of the Philippines and Fujitsu (Thailand) Co., will be renamed Toshiba Storage Device (Philippines) Inc. and Toshiba Storage Device (Thailand) Co., they said.

After the transfer, Toshiba will handle the marketing of all HDD products, including Fujitsu's. Most of Fujitsu's marketing offices outside of Japan will be transferred to Toshiba's overseas divisions.

Toshiba will then acquire an 80.1 percent stake in Toshiba Storage Device from Fujitsu for 24 billion yen by July 1, with Fujitsu handing over the remaining stake to Toshiba for 6 billion yen by Dec. 31, 2010.

The combined acquisition cost of 30 billion yen does not include 6 billion yen in net debt that Toshiba Storage Device will take over from Fujitsu's HDD business, the companies said.

The deal will entail the transfer of 800 employees in Japan and 7,000 employees overseas in the Fujitsu group's HDD divisions to the Toshiba group.

Toshiba will enhance its position as a vendor of small-form HDDs by diversifying into the area of enterprise HDDs for servers in which Fujitsu is a strong force. The deal will enable Toshiba to expand its solid state drive business by developing SSD products for servers and enterprise storage systems, they added.