Last week the deal was also given unconditional approval by the European Commission – the parties hope to complete later this year or early next
Hewlett Packard Enterprise (HPE) has won approval from the UK’s Competition and Markets Authority (CMA) to go ahead with its planned $14 billion acquisition of Juniper Networks.
This is after an investigation lasting less than two months. The CMA said it would publish the full text of its decision shortly.
Last week the European Commission also gave its unconditional permission for the transaction to proceed.
The Commission said “the transaction, as notified, would not significantly reduce competition on such markets. In particular, concerning the horizontal overlaps between the companies’ activities in the market for WLAN equipment, WAPs and Ethernet campus switches.”
It added, “Concerning the conglomerate links between Juniper’s switches and HPE’s activities in the global markets for the supply of high-performance computing…systems and mid-range servers, the Commission found that in the EEA the merged entity would not have the ability to engage in anticompetitive bundling or tying practices.”
The Commission outlines its reasoning for both conclusions in the statement.
When the proposed deal was announced, at a higher price than expected, HPE’s President and CEO, Antonio Neri (pictured), said in a statement, “HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands.
“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’s ancestor companies have not always had a happy history with outsize acquisitions and just before the takeover won the Commission’s approval, Juniper Networks reported a 17% fall in its Q2 revenues compared to the previous year to $1.19 billion and a 68% plummet in operating profit to $45 million. On the upside, it said its pipeline is looking healthy.
The companies still have other hurdles to clear but at the moment expect the acquisition to be completed late this year or early in 2025.
Not everybody is happy though. Hannes Gredler, CTO of the edge routing vendor RtBrick groused, “These big acquisitions are becoming the norm…The bottom line is that while HPE has strengthened its market position by acquiring Juniper, it has also left a concerning dent in competition, customer choice and confidence.”
And continued, “Another example is Nokia’s recent $2.3 billion acquisition of Infinera, underscoring the company’s push to dominate the optical network market, boosting its market share and enhancing its competitive edge.
“However, this move also reduces the number of independent vendors in the optical networking space, further consolidating market power among a few large entities and limiting customer choice. Acquisitions of this nature inevitably come with product overlap and resetting priorities by the acquiring company, leaving customers uncertain about the future of their chosen products.”