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Toshiba and Fujitsu Conclude Definitive Agreement on HDD Business Transfer

30 Apr, 2009

Toshiba Corporation
Fujitsu Limited

 

Tokyo—Toshiba Corporation (TOKYO: 6502) and Fujitsu Limited (TOKYO: 6702) today announced that they have concluded a definitive agreement on the transfer of Fujitsu's hard disk drive (HDD) business to Toshiba. The agreement follows a memorandum of understanding (MOU) signed by the companies on February 17, 2009. The companies will now seek to complete the business  transfer by the target date of July 1st, 2009.

1. Details of Transfer

Fujitsu's HDD related business and functions will be transferred to a new company, Toshiba Storage Device Corporation (TSDC). Fujitsu's HDD manufacturing subsidiaries, Fujitsu Computer Products Corporation of the Philippines (FCPP) and Fujitsu (Thailand) Co., Ltd. (FTC), will become Toshiba Storage Device (Philippines), Inc. (TSDP) and Toshiba Storage Device (Thailand) Co, Ltd.(TSDT). The HDD related business of Yamagata Fujitsu Limited will become Toshiba Storage Device Yamagata Corporation (TSDY). Upon completion of the transfer, these three companies will become wholly owned subsidiaries of TSDC.

After the transfer, Toshiba will handle the sales and marketing of all HDD products, including Fujitsu's, and entrust all aspects of design, R&D, quality assurance, production technology, and technology support to TSDC. Fujitsu's sales and marketing offices outside of Japan, with the exception of some offices in certain regions, will be transferred to Toshiba's overseas business operations. Toshiba will acquire a stake of 80.1 percent in TSDC by the target date of July 1st, 2009 and make it a Toshiba Group subsidiary. Fujitsu will continue to hold a stake of 19.9 percent until the end of December 2010. After that, Fujitsu will transfer its stake to Toshiba, at which point TSDC will become a wholly owned subsidiary of Toshiba.

New Company Structure

Figure of New Company Structure 

2. Value of Transfer

The value of the transfer is expected to be approximately 30 billion yen. Toshiba's 80.1% ownership of TSDC is expected to be valued at approximately 24 billion yen (at the time of the July close), and the remaining 19.9% ownership holding at approximately 6 billion yen (to be held until the end of December 2010). However, these amounts are subject to change upon completion of the transfer. 

Upon transfer of the HDD business on July 1st, TSDC will assume net debt of approximately 6 billion yen. This figure has been excluded from the indicated 30 billion yen value of the transfer.

3. Number of Employees

The transfer of the HDD business will see approximately 800 employees in Japan and approximately 7,000 employees worldwide transfer to Toshiba Group from Fujitsu Group.

Toshiba will reinforce its position as a leading vendor of small form factor HDDs by entering into the enterprise HDD business for server and data storage system applications, where Fujitsu is currently a leader. This move will also allow Toshiba to further enlarge its leading solid state drive (SSD) business by developing SSD products for servers and enterprise storage systems, thus maximizing the synergy with Fujitsu's enterprise HDD technology.

Toshiba aims to strengthen its overall competitiveness and  market standing by offering total storage solutions and services that meet a broad range of customer needs.

Outline of New Company

1. Company Name:  Toshiba Storage Device Corporation (TSDC)
2. Capital: 350 million yen (TBD)
3. Holding ratio: Toshiba Corporation    80.1%
Fujitsu Limited        19.9%
4. Representative Director TBD
5. Location: 1-1, Shibaura 1-Chome, Minato-ku, Tokyo, Japan
6. Employees: approx. 980
7. Scope of Business: HDD design, development, production technology, quality assurance

 

1. Company Name:  Toshiba Storage Device Yamagata Corporation (TSDY)
2. Capital: 10 million yen (TBD)
3. Holding ratio: Toshiba Storage Device Corporation  100%
4. Representative Director TBD
5. Location: 5400-2, Ooaza Higashine Kou, Higashine City, Yamagata, Japan
6. Employees: approx. 220
7. Scope of Business: HDD prototype design, quality assurance

 

1. Company Name:  Toshiba Storage Device (Philippines), Inc. (TSDP)
2. Capital: US$ 113.3 million (approx. 11.3 billion yen)
3. Holding ratio: Toshiba Storage Device Corporation  100%
4. Representative Director TBD
5. Location: Carmelray Industrial Park, Canlubang, Calamba, Laguna, Philippines
6. Employees: approx. 2,900
7. Scope of Business: Manufacturing for enterprise HDD, repairs

 

1. Company Name:  Toshiba Storage Device (Thailand), Co., Ltd. (TSDT)
2. Capital: 1 billion baht (approx. 3 billion yen)
3. Holding ratio: Toshiba Storage Device Corporation  100%
4. Representative Director TBD
5. Location: 60/90 
 (Navanakorn Industrial Estate Zone 3) Moo 19, Phaholyothin Rd.,
Klongluang, Pathumthani 12120, Thailand
6. Employees: approx. 3,900
7. Scope of Business: Manufacturing for 2.5-inch HDD

 

About Toshiba
Toshiba is a world leader and innovator in pioneering high technology, a diversified manufacturer and marketer of advanced electronic and electrical products spanning information & communications equipment and systems; digital consumer products; electronic devices and components; power systems, including nuclear energy; industrial and social infrastructure systems; and home appliances.

Toshiba was founded in 1875, and today operates a global network of more than 740 companies, with 198,000 employees worldwide. Visit Toshiba's web site at www.toshiba.co.jp/index.htm

About Fujitsu
Fujitsu is a leading provider of IT-based business solutions for the global marketplace. With approximately 160,000 employees supporting customers in 70 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. For more information, please see: www.fujitsu.com.

 

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Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement, but is subject to change without prior notice.

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