HPE closes $14B Juniper acquisition following regulatory approval – News

Hewlett Packard Enterprise Co. has closed its acquisition of Juniper Networks Inc. more than a year after signing the $14 billion deal.

The companies announced the milestone this morning. A few days earlier, the U.S. Justice Department ended an antitrust lawsuit that sought to block the transaction.

“As a result of both teams’ efforts over the last 18 months to prepare for this day, we are well positioned to swiftly integrate HPE and Juniper and we look forward to sharing key milestones as we progress,” HPE Chief Executive Officer Antonio Neri wrote in a blog post. 

The company sells network equipment for data centers, offices and 5G infrastructure through its Aruba subsidiary. Juniper competes in many of the same markets. During the first quarter, the latter company generated an adjusted net income of $147.2 million on $1.28 billion in revenue.

HPE expects the acquisition to double its networking business. Furthermore, Juniper’s assets will become accretive to the company’s adjusted earnings per share within a year. That will put the newly expanded networking business on track to generate more than half of HPE’s operating income.

The Justice Department filed its antitrust lawsuit over concerns about the deal’s impact on the WLAN, or wireless local-area network, segment. This product category encompasses offerings such as the Wi-Fi access points that companies use to provide wireless connectivity in their offices. In the lawsuit, antitrust officials argued that the Juniper acquisition would make the WLAN market less competitive.

The Justice Department ended the litigation after HPE made a series of commitments to address its concerns. 

The company will offload its Instant On WLAN business, including the associated intellectual property and personnel, within 180 days. Furthermore, HPE will license Juniper’s Mist AIOps technology to competitors. Mist is a software platform that uses artificial intelligence to help administrators troubleshoot network issues.

After implementing those measures, HPE will still be left with Juniper’s sizable WLAN business. The unit’s sales grew 21.9% year-over-year in the first quarter, to $120.9 million.

HPE is also gaining a range of other assets through the deal, including Juniper’s cloud networking business. In the first quarter, the latter company generated 29% more revenue from cloud providers than a year earlier. 

Juniper sells network equipment that infrastructure-as-a-service providers use to link together their data centers. Inside those data centers, the company’s Ethernet switches can be used to power AI clusters. Juniper also offers a software platform called Apstra Data Center Director that helps optimize the flow of traffic between graphics cards.

One of the methods that the company’s software uses to speed up AI clusters is called explicit congestion notification, or ECN. It allows network devices to notify the other components of a technology environment when they receive too much traffic. Upon receiving such an alert, an AI cluster can scale back request volumes to avoid overwhelming the network.

“Our new end-to-end network portfolio has robust hardware across all domains (enterprise, service provider, and cloud), managed by a single cloud-native management platform with on-premises and virtual private cloud options,” Neri wrote. 

Photo: HPE