The UK’s competition regulator, the Competition and Markets Authority (CMA), is investigating Hewlett Packard Enterprise’s (HPE) planned $14 billion acquisition of Juniper Networks to determine whether it raises competition concerns in the United Kingdom. The deal, announced in January 2024, involves HPE acquiring Juniper in an all-cash transaction for $40 per share. HPE has stated that the acquisition will enhance secure, unified, cloud-native, and AI networking, allowing the company to drive innovation from edge to cloud to exascale. This move aims to strengthen HPE’s networking business, which includes data center networks and has been a key growth driver. The acquisition will also enable HPE to leverage Juniper’s network security and AI-enabled enterprise networking offerings to better compete with networking giant Cisco System.
The CMA has initiated an investigation of the acquisition under the UK Companies Act 2002 to assess whether it will create a relevant merger situation leading to a substantial lessening of competition in any UK markets for goods or services. The regulator has set a deadline of August 14, 2024, to announce its decision on whether to refer the merger to a Phase 2 investigation. HPE had initially planned to finalize the acquisition by late 2024 or early next year but will now collaborate with the UK regulator to complete the required reviews and obtain authorization promptly.
Hewlett-Packard, a technology veteran, was established in 1939 in a Palo Alto garage and is considered one of the pioneering companies of Silicon Valley. HPE, its enterprise software, and networking-focused division, was established in 2015 following a split from HP, which continued to focus on manufacturing PCs, laptops, and printers. Despite past acquisition challenges, including the Autonomy scandal, HPE has been cautious about making significant acquisitions. In 2019, the company acquired veteran supercomputer maker Cray Inc. for $1.3 billion. In December 2020, HPE announced its relocation from California to Texas.
Overall, the investigation by the UK’s Competition and Markets Authority into HPE’s acquisition of Juniper Networks underscores the heightened scrutiny of high-value tech deals and their potential impact on market competition. The outcome of the investigation will determine whether the deal proceeds without any competition concerns or triggers a more in-depth Phase 2 scrutiny. HPE remains committed to working with the regulator to ensure a smooth approval process for the acquisition.
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https://www.silicon.co.uk/e-enterprise/merger-acquisition/uk-investigates-hpes-14bn-acquisition-of-juniper-networks-568775/amp