Toshiba, Fujitsu Merge Disk Operations

Darlington Musarurwa
14 Jan, 2009
New York City

In weak trading, stocks in Tokyo edged higher. Toshiba and Fujitsu are exploring a merger of hard disk business. Of the Nikkei 225 stocks, 136 increased, 73 declined, and 16 were unchanged. Casio Computer led advancers in the index shares with a rise of 8.2% followed by NSK Insulators gaining 6.3%.

[R]5:00AM New York, 7:00PM Tokyo - Toshiba and Fujitsu to combine hard disk businesses.[/R]

Japan stock indices rose on the news that Toshiba Corp. and Fujitsu are in talks to merge their hard disk businesses as a cost cutting measure.

Energy stocks also increased after oil prices rose to $38.80 a barrel as Saudi Arabia said it will cut more production than it earlier announced.

In Tokyo trading Nikkei 225 index rose 0.3% or 24.54 to 8,438.45, and the broader Topix Index gained 0.7% or 5.27 to 819.39.

In the first section of the Tokyo Stock Exchange 8.8 billion shares worth 597 billion yen were traded and in the second section 104 million shares valued at 771 billion yen changed hands.

Of the Nikkei 225 stocks, 136 increased, 73 declined, and 16 were unchanged. Casio Computer led advancers in the index shares with a rise of 8.2% followed by NSK Insulators gaining 6.3%.

Toshiba and Fujitsu to Combine Hard Disk Business

Toshiba and Fujitsu are in talks to combine their hard disk businesses in order to reduce costs as reported by Bloomberg News reported the merger news.

Toshiba will have a majority stake in the joint venture. The report said the combined operations of the two companies will generate 700 billion yen, surpassing Samsung’s hard disk drive business.

An agreement in expected before the end of this month. Toshiba spokesman Keisuke Ohmori confirmed that the companies were still in discussions.

According to the report, Fujitsu will slash its operating profit forecast for the year to March 31 to between 80 billion yen and 100 billion yen.

In October, the company had forecasted that the operating profit will be 150 billion yen.

Separately, Nikkei News said Toshiba will buy Fujitsu’s hard disk drive business for 40 billion yen.

Gainers & Losers

Casio Computer led gainers in the Nikkei 225 index stocks with a rise of 8.2% followed by increases in NSK Ltd. of 6.3%, in Toshiba Corp. of 6%, in TDK Corp. of 5.9%, and Jtekt Corp. of 5.6%.

Toshiba increased on news that the company is in talks with Fujitsu to merge its hard disk drive business. Fujitsu rose 5.3%.

Inpex jumped 5.3% after crude oil prices rose $2.50 to $38.8 per barrel as Saudi Arabia oil minister Ali-alNaimi said his country will lower production steeper than earlier announced in order to shore prices.

Shipping lines rose as the Baltic Dry Index, which gauges freight prices for bulk raw materials, advanced 2.5%. Hitachi Zosen climbed 3.6.

Sapporo Holdings led decliners in the Nikkei 225 index shares with a decline of 4.7% followed by losses in Fukuoka Financial of 4.4%, in Mitsubishi Paper of 4.4%, in GS Yuasa Corp. of 4.1%, and J Front Retailing of 3.9%.

Mitsubishi Paper fell as crude oil prices increased, sparking fears that this will affect margins. Hokuetsu jumped 3.7%.

Citigroup to Keep Private Banking Operations

Nikkei News reported today that the company will not sell its Japanese private business operations, including Nikko Cordial Securities.