The European Commission (EC) has unconditionally approved Hewlett Packard Enterprise (HPE)’s $14bn acquisition of artificial intelligence (AI)-native networks developer Juniper Networks.
HPE is engaged in IT infrastructure, related software, and cloud solutions while Juniper Networks delivers networking, infrastructure and security solutions.
Cleared under the EU Merger Regulation, the proposed transaction is found not to stifle competition in the European Economic Area (EEA).
The EC probed into the impact of the transaction across several markets, including the global market for wireless local area network (WLAN) equipment, the global market for wireless access points (WAPs), the EEA-wide market for Ethernet campus switches, and the global market for data centre switches.
EC cites little to moderate overlap in HP-Juniper Networks activities
According to its findings, the EC said that HPE’s acquisition of Juniper Networks would not significantly reduce competition in the markets.
The Commission concluded that the merged entity’s market position would remain moderate with regard to the horizontal overlaps between the companies’ activities in WLAN equipment, WAPs, and Ethernet campus switches.
The newly formed entity will also face competition from a broad range of competitors, said the regulator.
In addition, the EC concluded that HPE and Juniper Networks are not each other’s closest competitors.
Besides, customers possess a degree of countervailing buyer power, which allows them to respond effectively to potential price increases in WLAN equipment and Ethernet campus switches.
The EC further stated that, given the conglomerate links between Juniper Networks’ switches and HPE’s high-performance computing (HPC) systems and mid-range servers, the merged entity would not be able to involve in anticompetitive bundling or tying practices in the EEA.
HP now hopes to increase AI capabilities
Announced earlier this year, the all-cash deal is expected to enable HPE to accelerate AI-driven innovation.
Under the terms of the agreement, shareholders of the New York Stock Exchange (NYSE)-listed Juniper Networks will be paid $40 per share.
Juniper Networks offers a portfolio of cloud-delivered networking solutions, software, and services, including the Mist AI and Cloud platform.
These offerings assist organisations in securely and efficiently accessing the mission-critical cloud infrastructure that is essential for their digital and AI strategies.
HPE’s proposed merger with Juniper Networks is also being assessed by the UK’s antitrust enforcer Competition and Markets Authority (CMA). The phase 1 investigation was launched in June 2024.
The CMA’s decision is due on 14 Aug 2024.
