UK probes HPE's planned $14B Juniper Networks acquisition

The U.K.’s Competition and Markets Authority (CMA) has initiated a formal “phase 1” investigation into Hewlett Packard Enterprise’s (HPE) planned acquisition of Juniper Networks.

The CMA said it’s in the early stages of assessing whether the deal is likely to “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

HPE announced plans to acquire Juniper Networks back in January 2024, a deal designed to unify their respective strengths in the realms of networking and IT infrastructure, spanning servers, storage, consulting, routing, switching, and security. As with just about every mega deal these days, a major motivation behind the merger was — in corporate parlance — to “accelerate AI-driven innovation,” given the critical role that cloud infrastructure plays in the burgeoning AI movement.

At the time, HPE said it would pay $40 a share, representing a 32% premium over the most recent closing price — amounting to a total value of $14 billion.

A deal of this magnitude was always likely to attract regulatory scrutiny, which is perhaps why HPE stated that it expected to close the deal as late as early 2025 — a full year after it first announced its plans. The U.K. is the first jurisdiction to show its hand, though it’s likely the European Commission will at least take a look at the deal, while the Federal Trade Commission (FTC) in the U.S. could potentially raise concerns, too. In the meantime, Brazil’s regulators gave an unconditional clearance to the deal in May.

For now, the CMA is inviting comments from relevant stakeholders, with a deadline set for July 3. The CMA will then have until August 14 to decide whether to progress the investigation to a formal “phase 2” inquiry.

Regulatory roadblocks can potentially scupper deals in the works, as evidenced by Adobe last year, which was forced to pull the plug on its $20 billion bid for Figma after pushback both in the EU and the U.K.

HPE, for its part, remains confident it can get this deal over the line.

“We can confirm the U.K. Competition and Markets Authority has accepted our filing, as part of the standard process to review the proposed acquisition of Juniper Networks in several jurisdictions,” the company said in a statement issued to TechCrunch. “We are working to complete all necessary reviews and secure clearance quickly and efficiently so that we can begin delivering value to our customers as soon as possible. We continue to expect to close by the end of calendar year 2024 or early 2025.”