Fujitsu has pulled out of a proposed deal under which WD would buy its hard drive business for $550 million.

Fujitsu's president Kuniaki Nozoe claims the deal can't go through as the company was trying to sell its Japanese and overseas plants in a package, and keep many of the workers on board. It was unable to reach a favorable agreement with Western Digital, and dropped out of the deal.

Nikkei reported about the proposed deal back in October, but the financial crisis has taken a heavy toll on the industry since then, forcing WD to lay off some of its workers, cut costs and close plants.

More here.

Also read:

Fujitsu reportedly selling hard drive business