HPE announced its intent to acquire Juniper Networks in January 2024
The U.S. Department of Justice (DoJ) has settled its lawsuit challenging Hewlett Packard Enterprise’s (HPE) $14 billion acquisition of Juniper Networks, reaching a court-approved agreement that imposes significant divestiture requirements on HPE.
In January 2024, HPE announced its intent to acquire Juniper Networks to strengthen its product offerings amid growing demand for AI infrastructure and intensifying market competition. A year later, the DoJ filed suit to block the deal, arguing the combination “would eliminate fierce head-to-head competition between the companies, raise prices, reduce innovation and diminish choice for scores of American businesses and institutions.”
The DoJ specifically targeted the firms’ wireless LAN (WLAN) businesses. In response, HPE and Juniper issued a joint statement calling the DoJ’s analysis “fundamentally flawed.”
Despite these disagreements, the companies reached a settlement with the DoJ, announced on June 28, that allows the deal to proceed under strict conditions. HPE must 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 agreement also requires HPE to license Juniper’s AI Ops for Mist source code, used in WLAN systems, through an auction process. The license will be perpetual, non-exclusive and include optional transitional support and personnel transfers to help facilitate competition. The DoJ emphasized that the agreement ensures key software assets remain accessible to competitors seeking to challenge the merged company.
The DoJ initially sued to block the acquisition in January, warning that the tie-up of the second- and third-largest vendors in the enterprise-grade WLAN market would leave HPE and Cisco controlling more than 70% of the sector — severely limiting competition.
HPE’s concessions ultimately allowed it to avoid a trial scheduled to start on July 9.
HPE CEO Antonio Neri welcomed the settlement, highlighting the combined company’s enhanced AI capabilities: “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.”
This favorable outcome wasn’t entirely surprising. Throughout the dispute, HPE and Juniper argued that their merger would bolster America’s global competitiveness in “core tech,” describing it as “the critical infrastructure that enables our entire modern economy and includes essential technologies like large-scale compute, semiconductors and networking.” They claimed the deal would “create a robust U.S.-based provider of core technology infrastructure that can help to protect against national security risks in the global technology market.”
HPE and Juniper also asserted the acquisition would deliver “a modern, secure network built with AI and for AI to ensure a better user and operator experience,” insisting the combination would “create more competition, not less.”
As RCR Wireless’s Sean Kinney pointed out: Given that both the former and current U.S. administrations have championed — and subsidized — domestic technological leadership in areas like semiconductor manufacturing and Open RAN, the DoJ’s aggressive move to block this deal raises a crucial question: Why oppose a merger that could strengthen America’s competitive edge in critical network technologies?
