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LATEST NEWS

The DOJ moves to block HPE’s acquisition of Juniper over competition concerns

Marijan Hassan - Tech Journalist

The U.S. Department of Justice (DOJ) has filed a lawsuit in the Northern District Court of California to block Hewlett Packard Enterprise's (HPE) proposed $14 billion acquisition of Juniper Networks. The suit cites concerns over reduced competition and potential price increases for consumers. It alleges that the merger would eliminate a key competitor in the wireless LAN (WLAN) market, leading to less innovation and choice.



DOJ’s Antitrust Concerns

According to the DOJ, HPE, and Juniper are currently the second and third-largest providers in the WLAN space. The agency contends that merging the two would further consolidate an already concentrated market, diminishing competition.


“HPE and Juniper are successful companies. But rather than continue to compete as rivals in the WLAN marketplace, they seek to consolidate – increasing concentration in an already concentrated market,” said Omeed A. Assefi, Acting Assistant Attorney General at the DOJ’s Antitrust Division, in a statement on Thursday.


The lawsuit further alleges that HPE’s acquisition is a strategic move to eliminate a key competitor that has been encroaching on its profit margins. The DOJ cited internal HPE communications that revealed concerns about Juniper’s growing threat.


“Just a month before the proposed acquisition was announced, front-line HPE salespeople were concerned that ‘[t]he Juniper threat [was] dire’ because in dozens of opportunities, Juniper was ‘trying to unseat’ HPE,” the DOJ stated. Additionally, a former HPE executive allegedly urged aggressive competition, reminding employees that “there are no rules in a street fight” with Juniper and encouraging them to “kill” Juniper in sales battles.


HPE and Juniper push back

In response, HPE and Juniper issued a joint statement rejecting the DOJ’s reasoning.


“We believe the Department of Justice’s analysis of this acquisition is fundamentally flawed and we are disappointed in its decision to file a suit attempting to prohibit the closing of the transaction,” the companies stated.


They argued that the DOJ’s claims are “disconnected from market realities” and that the merger would, in fact, enhance competition by driving greater innovation and choice in the industry. “The transaction will not impede the ability of other WLAN vendors to vigorously compete,” the companies added.


Regulatory Roadblocks and Market Implications


HPE announced its intention to acquire Juniper just over a year ago, in a deal valued at $40 per share. The acquisition was expected to double the size of HPE’s networking business, with estimates that networking would contribute to more than half its annual operating income post-merger.


However, concerns over market overlap—especially given that HPE already owns WLAN vendor Aruba, which competes with Juniper’s Mist division—attracted scrutiny from antitrust regulators. While the UK’s Competition and Markets Authority and the European Commission have approved the deal, the DOJ’s lawsuit represents a significant hurdle for HPE.


With the DOJ now taking a firm stance against the merger, the fate of the acquisition remains uncertain

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