Fujitsu-Western Digital Deal's Off: Report

Japan's Fujitsu says there is no chance that it will sell its hard-disk drive business to Western Digital(WDC Quote), Reuters reports, despite repeated rumors that the firms were forging a deal.

Fujitsu, which competes in the hard-drive business with Seagate Technology (STX Quote), Western Digital and Hitachi (HIT Quote), has been in talks with Western Digital over the last few months, although a deal is now unlikely, according to a Japanese news report.

Reuters cited an article in Japan's Nikkei financial daily, which quoted Fujitsu President Kuniaki Nozoe. "I won't deny that we have had talks," he said, adding that, at the moment, there is "zero chance" of a deal.

"We do not comment on rumors," was the brief email response from a Western Digital spokesman late Friday.

The sharp appreciation of the yen made it difficult for the two firms to agree on a price, according to the Nikkei, which said that Fujitsu and Western Digital struggled to agree on other specifics of the deal.

The Nikkei said that Fujitsu was asking for a price of more than 50 billion yen ($550 million) for its sluggish hard-disk drive business. Initial media reports said that the firms were negotiating a price of $662 million to $945 million.

Earlier this month Western Digital announced plans to cut 2,500 jobs, or 5% of its workforce, as the company attempts to cope with weakening demand for its hard drives.

The Lake Forest, Calif., company also lowered its second-quarter revenue guidance from between $2.025 billion and $2.15 billion to a range between $1.7 billion and $1.8 billion.