Tokyo (Japan) – There is more consolidation in the hard drive (HDD) business as Toshiba said it intends to acquire Fujitsu’s money-losing computer mass storage unit. If the merger goes through, Toshiba will close the gap to Hitachi GST, but remain the fourth largest hard drive maker worldwide.

Toshiba announced that it will be acquiring Fujitsu’s HDD technology and related assets to strengthen its position in the 1.8” and 2.5” devices segments as well as the SSD market. The company intends to purchase about 80% of Fujitsu’s computer storage division within the first quarter of its fiscal year 2009 and make it a Toshiba subsidiary. Fujitsu will continue to hold a stake of less than 20% in the new company for “a certain period of time.”

There was no indication of the purchase price, but analysts indicated that the price will be at least $1 billion.

According to iSuppli, Toshiba currently holds a global HDD market share of about 7.2%, while Fujitsu stands at about 6.9%, which puts the two firms at #4 and #5 in the ranking of the largest HDD manufacturers worldwide. Hitachi GST is at # with about 17.3%, WDC at 22.0% and Seagate with 33.9%. Toshiba is unlikely to surpass Hitachi GST at this time, but will close the gap and make significant progress in the 2.5” and 1.8” markets and increase its competitiveness – especially with Seagate.