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HPE splashes out $14bn on Juniper Networks buy to capture more AI sales

HPE splashes out $14bn on Juniper Networks buy to capture more AI sales

Hewlett Packard Enterprise and Juniper Networks have confirmed HPE’s acquisition of the service provider and enterprise networking company, after news of the deal sneaked out earlier this week.

HPE will pay around $14 billion for Juniper – $1 billion more than was originally mooted – in an all-cash transaction.

“The combination of HPE and Juniper advances our portfolio mix shift toward higher-growth solutions and strengthens our high-margin networking business, accelerating the sustainable profitable growth strategy,” said HPE.

The acquisition is expected to double HPE’s networking business, creating a “new networking leader” with a “comprehensive portfolio” that presents customers and partners with a “compelling new choice” to drive business value, HPE added.

The adding of Juniper’s AI-driven wireless networking solutions will certainly strengthen HPE in its ongoing battle with Cisco in the wireless networking market, not to mention gaining a big communications service provider (CSP) customer base in supporting high-bandwidth fixed lines.

Upon completion of the transaction, Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting to HPE president and CEO Antonio Neri.

“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,” said Neri (pictured). “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.

“I welcome Juniper’s talented employees to our team as we bring together two companies with complementary portfolios and proven track records of driving innovation within the industry,” Neri added.

On a pro forma basis, after the deal, the new networking segment will increase from around 18% of total HPE revenue as of fiscal year 2023, to approximately 31%, and contribute more than 56% of HPE’s total operating income, HPE said.

Under the terms of the agreement, Juniper shareholders will receive $40 per share in cash upon the completion of the transaction. The purchase price represents a premium of approximately 32% to the unaffected closing price of Juniper’s common stock on 8 January, 2024, the last full trading day prior to media reports regarding a possible transaction.

The transaction is expected to close in late calendar year 2024 or early calendar year 2025, subject to regulatory approvals.