DoJ approves HPE’s $14B Juniper acquisition with wireless asset divestitures

The U.S. Department of Justice has approved Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks after reaching a settlement agreement that requires significant divestitures from HPE. The deal, which strengthens HPE’s position in AI infrastructure and networking, will proceed under strict conditions designed to preserve competition in the enterprise wireless LAN market.

What you should know: HPE must divest key wireless networking assets and license critical software to maintain market competition.

• HPE will sell its Instant On WLAN campus and branch network switching business, including all related assets, intellectual property, R&D personnel, and customer relationships to a DoJ-approved buyer within 180 days.
• The company must also license Juniper’s AI Ops for Mist source code through an auction process, providing perpetual, non-exclusive access to competitors.
• These concessions allowed HPE to avoid a trial scheduled to begin on July 9.

The big picture: The DoJ initially sued to block the merger in January, warning that combining the second- and third-largest enterprise WLAN vendors would give HPE and Cisco control of more than 70% of the market.

• HPE announced its intent to acquire Juniper Networks, a networking equipment company, in January 2024 to strengthen its product offerings amid growing demand for AI infrastructure and intensifying competition.
• The DoJ argued the deal “would eliminate fierce head-to-head competition between the companies, raise prices, reduce innovation and diminish choice for scores of American businesses and institutions.”

Why this matters: The settlement creates a template for how tech mergers can proceed in competitive markets while addressing antitrust concerns through targeted divestitures rather than outright blocking.

• The agreement ensures key software assets remain accessible to competitors seeking to challenge the merged company’s market position.
• HPE gains enhanced AI capabilities and networking solutions while maintaining competitive dynamics in the wireless LAN sector.

What they’re saying: HPE CEO Antonio Neri welcomed the settlement, emphasizing the strategic benefits of the combination.

• “The combination of HPE Aruba Networking and Juniper Networks will provide customers with a comprehensive portfolio of secure, AI-native networking solutions, and accelerate HPE’s ability to grow in the AI data centre, service provider and cloud segments,” Neri stated.
• HPE and Juniper had jointly called the DoJ’s analysis “fundamentally flawed” and argued the merger would “create more competition, not less.”

Strategic implications: Both companies positioned the deal as essential for U.S. technological competitiveness, describing it as creating “a robust U.S.-based provider of core technology infrastructure that can help to protect against national security risks in the global technology market.”

• They emphasized the merger would deliver “a modern, secure network built with AI and for AI to ensure a better user and operator experience.”
• The companies argued the combination would bolster America’s global competitiveness in “core tech” and “critical infrastructure that enables our entire modern economy.”