Hewlett Packard Enterprise (HPE) will buy Juniper Networks for approximately $14bn, the enterprise technology company has confirmed. If agreed, the deal will see the latter’s shareholders receive $40 per share in cash. The acquisition will also augment HPE’s networking capabilities amid rising demand for faster intra-server communication speeds amid heightened market interest in AI applications.
“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,” said HPE’s chief executive, Antonio Neri, in a statement.
Juniper deal strengthens HPE network capabilities
The announcement follows a day of speculation about an impending acquisition of Juniper Networks by HPE after the outlines of a possible deal were published by the Wall Street Journal. Founded in 1996, the former company specialises in routing and switching hardware for data centres, in addition to software-based SDN, switching and security products. Recent years have also seen it branch out into providing AI-enabled enterprise networking operations and data centre routing services through Wide Area Network (WAN) offerings.
Adding Juniper Networks to its portfolio will double HPE’s networking business, the latter confirmed, adding that the acquisition will also strengthen its ability to deliver AI-related and edge-to-cloud products and services. “These trends, and AI specifically, will continue to be the most disruptive workloads for companies, and HPE has been aligning its portfolio to capitalise on these substantial IT trends with networking as a critical connective component,” said the company.
HPE bets on networking future
Juniper Networks will not be the first business of its ilk to be acquired by HPE. In 2009, Hewlett-Packard bought switch maker 3Com for an estimated $2.7bn, following that deal with a $3bn bid for Aruba Networks by its newly minted successor, Hewlett Packard Enterprise, in 2015. The latter acquisition worked wonders for HPE’s bottom line, with Aruba Networks constituting 39.3% of its buyer’s operating income last year.
It remains unclear as to whether the acquisition of Juniper Networks will prove similarly beneficial to HPE’s shareholders – though the enterprise technology business claims that the deal will allow it to target “higher-growth, higher-margin businesses with large free cash flow potential” in the future. The move is also in keeping with HPE’s focus on expanding its hybrid cloud services. In September 2023 the firm reorganised its disparate cloud service offerings into a single business unit. The move would, CEO Neri said at the time, “further unify our portfolio and enhance the delivery of a true cloud experience for our customers and partners”.