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HPE Completes $14 Billion Acquisition of Juniper Networks

Published 6 hours ago3 minute read
HPE Completes $14 Billion Acquisition of Juniper Networks

Hewlett Packard Enterprise (HPE) officially concluded its $14-billion all-cash acquisition of Juniper Networks on Wednesday, July 3, 2025, following a crucial regulatory approval in the US. This strategic move aims to significantly bolster HPE's position in the rapidly expanding artificial intelligence (AI)-driven networking sector and enhance its competitiveness against industry giants like Cisco. The acquisition is set to create an industry-leading, cloud-native, and AI-driven IT portfolio, encompassing a comprehensive, modern networking stack, as stated by HPE.

According to HPE, the transaction effectively doubles the size of its networking business. It is also expected to accelerate the company’s portfolio shift towards higher-margin and higher-growth areas, positioning HPE for sustained long-term profitable revenue growth. Antonio Neri, President and CEO of HPE, emphasized the significance of this milestone, remarking, 'Today begins a new era for HPE – we are now at the epicenter of the transformation of IT, where AI and networking are converging.' This convergence is central to HPE’s strategy to offer a modern network architecture and products across hybrid cloud, AI, and networking, thereby expanding its total addressable market into adjacent segments such as data centers, firewalls, and routers.

Rami Rahim, the former CEO of Juniper Networks, will now spearhead the combined HPE Networking business as its President and General Manager. Rahim expressed his excitement about the merger, stating, 'HPE and Juniper have a unique opportunity to disrupt the networking industry at the most important and relevant time.' He added that the combination of technologies and teams presents an exhilarating opportunity to compete vigorously not just with Cisco, but across the entire competitive landscape. The integration is expected to allow HPE to provide customers and partners with a secure network purpose-built with and for AI.

Financially, the acquisition of Juniper’s high-margin business is anticipated to be accretive to non-GAAP EPS in the first post-close year. The combined networking business is projected to contribute over 50% of HPE’s total company operating income, underscoring its significant impact on the company’s financial health. The US Justice Department's recent settlement of its lawsuit challenging the acquisition mandated the combined entity to divest HPE’s Instant On wireless networking business and license the source code for Juniper's Mist AI software, which is integral to Juniper's wireless local area network (WLAN) products.

Despite the strategic advantages, the combined entity faces a considerable challenge in the competitive landscape, particularly against Cisco. Research from Dell'Oro Group highlights that Cisco commands over a third of all enterprise market revenues, while HPE and Juniper combined account for approximately 8%. Siân Morgan, a research director at Dell'Oro Group, noted that becoming a market leader will be a long-term endeavor requiring a powerful product offering that emphasizes simplicity and provides a lower-cost alternative to Cisco’s solutions. Rahim’s immediate priorities include rationalizing road maps, achieving the promised $450 million in General and Administrative expense (G&A) savings, and aligning sales teams and channels.

HPE's established extensive channel and installed base, coupled with Juniper’s Mist AIOps engine, are seen as key differentiators that could enable the company to challenge Cisco effectively. The merger is poised to increase research and development scale, leading to faster updates across networking silicon, systems, and software. Juniper shareholders approved the acquisition on April 2, 2024, more than a year after HPE initially announced its intent to enhance its AI offerings. With the transaction's completion, Juniper’s common stock has ceased trading on the NYSE, and Datadog Inc is set to replace Juniper Networks in the S&P 500. For its quarter ended April 30, HPE reported revenue of $7.63 billion and has forecasted third-quarter revenue between $8.2 billion and $8.5 billion.

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