HPE $14bn Juniper Acquisition Set For ‘Unconditional’ EU Approval

Hewlett Packard Enterprise (HPE) is expected to secure unconditional EU approval for its $14 billion (£11bn) AI-fuelled acquisition of Juniper Networks, Reuters reported.

HPE filed with the European Commission earlier this month for regulatory approval of the deal, which was announced in January, giving regulators until 1 August to either approve it or form a full-scale investigation.

The company was expected to emphasise the market power of market leader Cisco in its arguments to the Commission over possibile competition concerns, Reuters earlier reported, citing unnamed sources.

Juniper shareholders voted overwhelmingly in April to approve the deal, with less than than 1 percent voting against it.

AI infrastructure

The massive acquisition comes as companies rush to upgrade their infrastructure to provide AI services.

It one of the few carried out by HPE since HP’s failed buyout of software services firm Autonomy in 2011, which predated HP’s split into HP and HPE in 2015.

HPE said in January that Juniper has agreed to be acquired in an all-cash transaction for $40 per share, a 32.4 percent premium to the stock’s most recent close.

HPE said the deal was a “highly complementary combination [that]… enhances secure, unified, cloud and AI-native networking to drive innovation from edge to cloud to exascale.”

The acquisition is expected to double HPE’s networking business, and to provide it with “a comprehensive portfolio that presents customers and partners with a compelling new choice to drive business value”, the company said.

Networking growth

HPE noted the explosion of AI and hybrid cloud-driven business is accelerating demand for secure, unified technology solutions that connect, protect, and analyse companies’ data from edge to cloud.

HPE’s networking business, including data centre networking, has been delivering the company’s fastest growth and the acquisition is intended to add Juniper’s high-margin network security and AI-enabled enterprise networking offerings to the unit.

“The combination of HPE and Juniper advances HPE’s portfolio mix shift toward higher-growth solutions and strengthens its high-margin networking business, accelerating HPE’s sustainable profitable growth strategy,” HPE stated.

The UK competition regulator, the Competition and Markets Authority (CMA), said last month it was investigating the merger over competition concerns and said it would announce a decision over whether to refer the merger for a Phase 2 investigation by 14 August.

HPE had been expecting to close the acquisition by the end of 2024 or early next year, but said it woulid work with the CMA to complete necessary reviews and secure clearance as soon as possible.