Official: Hewlett Packard Enterprise wants to swallow Juniper Networks in $14B deal

Monopoly watchdogs permitting

Hewlett Packard Enterprise officially announced Tuesday its intent to acquire Juniper Networks in a deal valued at $40 per share, or roughly $14 billion.

This comes after rumors of a takeover began to swirl earlier this week. Prior to the whispering, Juniper was cruising along at about $30 a share. That shot up to about $36 apiece Monday as gossip spread.

HPE expects the acquisition to effectively double the size of its networking business. When complete, the HPE's networking segment is expected to contribute to more than half of the US IT giant's annual operating income. If it all goes ahead, this would also be the largest merger in Hewlett Packard history since the 2011-era Autonomy fiasco, back when HPE and HP Inc were one HP.

As our friends at The Next Platform highlighted in an analysis of the impending takeover this week, HPE is no stranger to networking, having developed and built its own ASICs and equipment. Over the years the tech titan has also picked up several networking vendors to expand its portfolio. In 2015, the biz dropped $3 billion on Aruba networks, and in 2009 it blew $2.7 billion on switch maker 3Com.

A major emphasis of the Juniper acquisition appears to center around the opportunity to capitalize on the growing market for AI products.

"This transaction will strengthen HPE's position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders," HPE CEO Antonio Neri said in statement this evening that hit all of the requisite buzzwords.

Juniper, for its part, presents several opportunities, not the least of which is the company's Mist wireless LAN and switching product that's packed with machine-learning things like chatbots and AIOps features to allegedly help techies proactively identify and remediate network anomalies.

While it's true Juniper will dramatically expand HPE's network portfolio, there's also a considerable amount of overlap with existing product divisions to deal with. One of the more notable being that both Aruba and Mist compete in the same market against the likes of Cisco Meraki and Extreme.

Whether this market consolidation will attract the ire of monopoly regulators remains to be seen – they have been standing up to Big Tech a little more lately – and it's hard not to see this being disruptive for existing Juniper and Aruba customers while they sort out consolidation plans.

Should the merger move forward unchallenged, we can also expect to see a shakeup of HPE's leadership with Juniper CEO Rami Rahim taking over combined company's networking business and reporting directly to Neri.

HPE will discuss the implications of the deal in greater detail during an investor call at 0830 US Eastern time Wednesday. ®

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