Commission approves proposed acquisition

12 May 2009

The European Commission has approved under the EU Merger Regulation the acquisition of the hard disk drive business of Fujitsu Limited by Toshiba Corporation.

The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Toshiba manufactures and markets a range of high technology electronic and electrical products, including hard disk drive (HDD) products, notably various types of Mobile HDDs and various electronic products that use these HDDs.

Fujitsu HDD Business comprises worldwide assets and subsidiaries of Fujitsu in the production, design, sales, and research and development of HDDs, notably 2.5in Mobile and 2.5in and 3.5in Enterprise HDDs, but excluding Fujitsu's HDD media, head and component development and production operations.

Although the transaction would render the combined entity number one producer of Mobile HDDs, in particular of 2.5in Mobile HDDs in term of market share, the Commission's market investigation revealed that the HDD market was competitive and that the transaction would therefore not give rise to competition concerns in these markets. Post-transaction, Toshiba would continue to face significant competitors, in a market where technological progress is relatively fast, resulting in short product life cycles.

Toshiba is active in numerous markets that are vertically linked to the market of Mobile HDDs. The most significant are the downstream markets of laptops and other consumer electronic products. However, the combined entity is unlikely to prevent downstream competitors from access to Mobile HDDs as inputs, given that Toshiba does not possess sufficient market power in Mobile HDDs.

Furthermore, Toshiba does not represent a significant part of the demand for Mobile HDDs, so the Commission found that there is no risk of excluding competing suppliers of Mobile HDDs from access to customers.

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