EU Approves Hewlett Packard Enterprise’s $14bn Juniper Acquisition

Hewlett Packard Enterprise (HPE), as expected, secured the unconditional approval from the European Union for its $14 billion (£11bn) AI-fuelled acquisition of Juniper Networks.

The European Commission announced it had “approved unconditionally… the proposed acquisition of Juniper Networks Inc. (‘Juniper’) by Hewlett Packard Enterprise Company (‘HPE’). The Commission concluded that the transaction would raise no competition concerns in the European Economic Area (‘EEA’).”

It was back in January this year when Juniper’s board had agreed to be acquired in an all-cash transaction that would allow HPE to exploit Juniper’s network security and AI-enabled enterprise networking offerings.

EU approval

HPE said at the time that the deal is a “highly complementary combination … 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.

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

The European Commission said that based on its market investigation, the Commission found that the transaction, as notified, would not significantly reduce competition in the markets for wireless local area network equipment and access points, ethernet campus switches, and data centre switches.

UK investigation

But HPE still awaits a decision from the competition regulator in the United Kingdom, after the CMA in June had announced it was investigating the deal.

The CMA said at the time it was “considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

It invited feedback from interested parties, and said the deadline when it will announce its decision whether to refer the merger for a phase 2 investigation has been set for 14 August 2024.

HPE had been expecting to close the acquisition by the end of 2024 or early 2025.

Tech veteran

Hewlett-Packard is regarded as one of the founding companies of California’s tech homeland of Silicon Valley, after being founded in 1939 in a Palo Alto garage.

HPE itself was created in the 2015 split of Hewlett-Packard, which saw HPE concentrating on enterprise software and networking, whereas HP focused on making PCs, laptops and printers.

Since then HPE has mostly avoided making large acquisitions (after the Autonomy debacle), although it did purchase veteran supercomputer maker Cray Inc for $1.3bn back in 2019.

In December 2020 HPE announced it was leaving California and moved its headquarters to Texas.