Toshiba said on Wednesday it is in talks to buy Fujitsu Ltd's hard-disk drive business in a deal reportedly worth 30-40bn yen ($335-$447m) and potentialy creating the world's largest maker of small hard drives.
The Nikkei business daily earlier reported that the deal would be announced at the end of the month if the heads of the two companies come to an agreement at a meeting to be held within the week.
Both Toshiba and Fujitsu confirmed today that they are holding negotiations but no agreement has been made.
"There were reports in the media today regarding Fujitsu Limited's hard disk drive (HDD) business. These reports are not based on any announcement made by Fujitsu," reads Fujitsu's announcement.
"Reports in today's media of a potential transaction in the hard disk drive business are not based on any announcement by Toshiba. While the companies involved are in negotiations, nothing has been decided yet," Toshiba said today.
Such a deal would create the world's largest maker of small hard drives that are used in electronics products such as laptops and car navigation systems.
Fujitsu is looking at selling its remaining hard-drive operations to other firms with an eye on withdrawing from the business altogether, the Nikkei said.
Seagate Technology, the world?s largest producer of hard- disk drives, bought magnetic-head manufacturer Maxtor in 2007, while its closest rival Western Digital paid $1 billion for component maker Komag Inc. last year.
Hitachi Ltd., the world?s third-largest maker of the drives, returned the business to profit in the quarter ended March 2008 after cutting about 11 percent of workers at the unit and closing plants. The operation had lost money since Hitachi bought factories from IBM in 2002.