The US Department of Justice (DOJ) has taken legal action to prevent Hewlett Packard Enterprise (HPE) from proceeding with its planned $14bn acquisition of Juniper Networks. The lawsuit, submitted in the Northern District of California, argues that the merger would reduce competition in the enterprise wireless networking sector and violate antitrust laws. The DOJ contends that the transaction could lead to higher prices and reduced innovation in a market that plays a critical role in business and institutional network infrastructure.
HPE and Juniper Networks are among the top providers of enterprise wireless local area network (WLAN) technology in the US. The DOJ claims the acquisition would consolidate market power, leaving only two dominant players, HPE and Cisco Systems, controlling over 70% of the sector. The department argues that removing Juniper Networks as an independent competitor would reduce pricing pressure and slow technological development.
The complaint highlights Juniper’s expansion in the WLAN space, citing its role in driving down costs and increasing competition. Internal HPE communications referenced in the lawsuit suggest the company viewed Juniper Networks as a growing threat and implemented strategies to counter its market presence. The DOJ claims that without Juniper Networks, businesses and institutions relying on WLAN technology could face fewer choices and higher costs.
In its legal filing, the DOJ argues that the enterprise WLAN sector is already highly concentrated and that the proposed acquisition would further limit options for customers. The department points to past antitrust actions in the technology industry as precedent for blocking deals that could stifle competition in essential infrastructure markets.
“HPE and Juniper are successful companies. But rather than continue to compete as rivals in the WLAN marketplace, they seek to consolidate — increasing concentration in an already concentrated market,” said DOJ’s Antitrust Division Acting Assistant Attorney General Omeed Assefi. “The threat this merger poses is not theoretical. Vital industries in our country — including American hospitals and small businesses — rely on wireless networks to complete their missions. This proposed merger would significantly reduce competition and weaken innovation, resulting in large segments of the American economy paying more for less from wireless technology providers.”
HPE and Juniper Networks reject antitrust claims
Both HPE and Juniper Networks are opposing the lawsuit, maintaining that the WLAN market remains competitive with multiple established vendors. The firms said that they remain committed to completing the deal despite regulatory opposition.
“We believe the Department of Justice’s analysis of this acquisition is fundamentally flawed and we are disappointed in its decision to file a suit attempting to prohibit the closing of the transaction,” the companies said in a joint statement. “We will vigorously defend against the Department of Justice’s overreaching interpretation of antitrust laws and will demonstrate how this transaction will provide customers with greater innovation and choice, positively change the dynamics in the networking market by enhancing competition and strengthen the backbone of US networking infrastructure.”
HPE argues that shifting enterprise trends, such as cloud-driven networking and artificial intelligence, have intensified competition beyond a small group of dominant players. The company also points to global regulatory approvals in 14 jurisdictions, including the European Commission and the UK’s Competition and Markets Authority, which cleared the acquisition without conditions.
HPE maintains that enterprises frequently evaluate multiple vendors before making networking investments, ensuring competition remains strong. The company asserts that WLAN technology continues to evolve, with emerging startups and established firms actively competing in areas such as software-defined networking and AI-driven automation.
Juniper Networks has also defended the acquisition, stating that the combination would allow the companies to invest in new technologies and enhance security capabilities for enterprise customers. Both companies argue that rather than limiting competition, the deal would create a stronger alternative to existing market leaders.
Under the terms of the deal announced in January 2024, HPE plans to acquire Juniper Networks in an all-cash deal at $40 per share. The company expects the acquisition to expand its networking business and contribute to revenue and cash flow growth in the first year post-completion. HPE expects the merger will strengthen US networking infrastructure, particularly in emerging technologies such as 6G and quantum-secure communications. The company also highlights its plans to accelerate investment in research and development following the acquisition, focusing on network automation, cloud-native solutions, and AI-driven security tools.
Read more: UK CMA clears HPE’s $14bn acquisition of Juniper Networks
