Fujitsu, Western Digital talking on hard drives: source

TOKYO Wed Oct 1, 2008 8:25pm EDT

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TOKYO (Reuters) - Japan's Fujitsu Ltd is in talks with Western Digital Corp and others on the sale of its money-losing hard drive business, a company source said on Thursday.

Reports that it was in talks sent Fujitsu's share price up 3.3 percent to 620 yen, against the benchmark Nikkei's 0.3 percent rise at 0008 GMT.

Fujitsu denied that it was now approaching an agreement or arranging a sale.

Fujitsu, which competes in hard drives with bigger rivals Seagate Technology Western Digital and Hitachi Ltd aims for a sale of the business by year-end, under pressure from price falls, said the source.

If talks with Western Digital succeed, the deal would expand Western Digital's presence in laptop hard drives in its bid to catch up to No.1 Seagate.

Fujitsu and Western Digial are negotiating a price of 70 billion yen to 100 billion yen ($661.5 million to $945 million), the Nikkei business daily reported Thursday morning.

"There is no truth at this time to the Nikkei report concerning our hard drive business," Fujitsu said in a statement.

Fujitsu, which also competes with International Business Machines Corp and Electronic Data Systems Corp in IT services, is trying to focus more resources on its IT consulting business.

(Reporting by Mayumi Negishi; Editing by Chris Gallagher)

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