UK Investigates HPE’s $14bn Acquisition Of Juniper Networks

UK competition regulator begins investigation into the multi billion dollar acquisition of Juniper Networks by Hewlett Packard Enterprise

The UK competition regulator, the Competition and Markets Authority (CMA) has announced it is investigating another billion dollar acquisition by two American tech firms.

The CMA announced on Wednesday that it is investigating whether Hewlett Packard Enterprise’s (HPE) planned $14 billion acquisition of Juniper Networks will result in competition concerns in the UK.

It was back in January 2024 when HPE had announced that Juniper had agreed to be acquired in an all-cash transaction for $40.00 per share, making the deal worth approximately $14 billion.

CMA investigation

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.”

To put that in English, HPE’s networking business (that includes data centre networking) is the division that has been one of its principle growth drivers of late, and the acquisition will allow HPE to exploit Juniper’s network security and AI-enabled enterprise networking offerings.

The acquisition will also help HPE better challenge networking powerhouse Cisco System

But now the CMA in its notice has stated it is investigating the deal under the UK’s Enterprise Act 2002.

The CMA said it is “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 is inviting 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 at 14 August 2024.

HPE had been expecting to close the acquisition by the end of 2024 or early next year, but it told Reuters it will work with the UK regulator to complete necessary reviews and secure clearance as soon as possible.

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.