Toshiba, Fujitsu to combine hard-disk units

Toshiba Corp and Fujitsu Ltd are in final talks to combine their hard-disk drive businesses as the computer makers try to reduce costs, according to four people familiar with the discussions.

Toshiba, Japan's biggest chipmaker, would have a majority stake in any joint venture, the people said. Fujitsu, a maker of chips, computers and software, is in discussions with several companies about its hard-disk drive business, spokesman Etsuro Yamada said.

Fujitsu shares surged as much as 8.6 percent and Toshiba gained on speculation a partnership may help the Tokyo-based companies improve margins and gain ground on the biggest makers of hard-disk drives for personal computers. The combined operations would have revenue of almost 700 billion yen ($7.8 billion), more than that of the disk-drive business of Samsung Electronics Co, the world's fourth-largest manufacturer.