HPE confirmed had agreed a deal to acquired Juniper Networks for $14 billion in January 2024
The U.K. Competition and Markets Authority confirmed it has started a preliminary investigation into the potential implications of cloud and edge solutions provider Hewlett Packard Enterprise (HPE)’s $14 billion acquisition of enterprise networking specialist Juniper Networks.
In a statement, the U.K. regulator noted it planned to look into whether the proposed acquisition would potentially affect competition for goods and services in the domestic market.
The regulator said it is working to a deadline of August 14 to decide whether to refer the deal for a deeper investigation and is inviting comments from interested parties until July 3.
“The CMA 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,” the regulator said.
In January, HPE confirmed it had agreed a deal to acquire Juniper Networks for $14 billion. The acquisition will double HPE’s networking business, increasing from around 18% of its total annual revenue to 31%, based on 2023 numbers; the combined networking business would represent more than 56% of HPE’s total operating income.
HPE called it an “important step” in its “portfolio shift towards higher-growth solutions and a higher-margin business”. It confirms its strategic pivot to make critical fixed and wireless networking integral to the sale of its traditional computing portfolio, as enterprises take advantage of developing artificial intelligence (AI) tools to drive digital change – “from edge to cloud to exascale”. It said the combined business will create a “new networking leader”.
The agreement has been approved by the boards of both firms. The transaction is expected to close in late 2024 or early 2025, subject to shareholder and regulatory approvals.
The pair expect to achieve joint operating efficiencies and cost synergies of $450 million per annum within 36 months of the deal’s close.
In a previous earnings call, HPE president and CEO Antonio Neri said the proposed transaction was currently going through the regulatory process and is expected to close in line with an originally communicated estimate of the end of 2024 or early 2025.