Hewlett Packard Enterprise (HPE) is in advanced talks to acquire Juniper Networks in a deal valued at around $13 billion, according to multiple reports published January 8th. The deal would allow HPE to expand its presence in the networking solutions market and better compete with rivals like Cisco.
Key Details of Potential Deal
- HPE is offering approximately $32 per share to acquire Juniper, representing a nearly 30% premium on Juniper’s last closing price prior to reports of the deal.
- The total deal value is estimated to be around $13 billion including debt.
- Juniper’s board is meeting January 9th to review the offer and negotiations are still ongoing.
- The deal could be announced later this week if approved by Juniper’s board.
Juniper Networks is a leading provider of high-performance networking products and solutions including routers, switches, network management tools and more.
HPE is looking to accelerate its strategy in the networking space by acquiring Juniper’s technology and talent. Combining the companies could allow HPE to offer more compelling end-to-end solutions to compete with Cisco.
Impact on Stock Prices
News of the potential buyout sent Juniper’s stock price surging over 25% to approximately $31 in trading January 8th. Meanwhile, HPE’s stock declined around 3% as investors digest the expensive deal.
| Company | % Change January 8th | Share Price January 8 Close |
|---|---|---|
| Juniper Networks | +26% | $30.86 |
| Hewlett Packard Enterprise | -3% | $16.03 |
If the deal goes through at the reported price of around $32 per share, it would represent roughly a 30% premium for Juniper shareholders compared to the $24.77 closing price prior to reports of the negotiations.
Strategic Rationale Behind Deal
Industry analysts view HPE’s potential acquisition as strategically sound in strengthening its competitive positioning, with several benefits:
- Bolsters HPE’s networking portfolio with Juniper’s innovative routers, switches, software-defined networking and other solutions
- Adds significant networking talent and IP to HPE
- Creates opportunities to cross-sell across enterprise customer bases
- Positions HPE with an end-to-end networking portfolio to better compete with Cisco
- Leverages potential cost synergies between the massive enterprise technology players
With the deal, HPE aims to accelerate its intelligent edge vision and strategy for providing secure connectivity solutions from cloud to edge. Juniper’s networking expertise combined with HPE’s offerings in compute, storage and more could provide a compelling package for enterprise customers.
What’s Next if Deal is Finalized
If Hewlett Packard Enterprise successfully completes its acquisition of Juniper Networks at the reported $13 billion price tag, it would rank among the largest tech deals in recent years.
- The deal is expected to close in HPE’s fiscal Q2 2024, pending Juniper shareholder and regulatory approval
- HPE will likely embark on integrating Juniper’s employees and product portfolio into its operations
- Job cuts are expected eventually as the combined company looks for cost saving opportunities, but the initial focus will be on maintaining talent and taking advantage of the expanded solution breadth
- HPE CEO Antonio Neri has experience with large acquisitions, including HPE’s 2019 buyout of supercomputer maker Cray
Some industry watchers say HPE could use the Juniper deal to spur more M&A activity as it looks to build out a robust networking business. With the transformation underway at both companies, customers can expect new and improved solutions that bridge networking, storage, computing and more at the intelligent edge.
This article includes reporting from The Wall Street Journal, Bloomberg and other business news sources
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