Low Offers for Instant On Undercut HPE’s Juniper Merger Remedy

The sale process, described in court records reviewed by Bloomberg, offers a rare public look at how merger remedies can play out after a settlement with federal antitrust enforcers. It also adds fuel to an ongoing fight over whether the asset package HPE is divesting is substantial enough to preserve competition following the Juniper deal.

HPE’s efforts centered on its Instant On networking business, which the company agreed to sell under a June settlement with the U.S. Justice Department. That agreement allowed the Juniper acquisition to move forward, but it is still being challenged by a group of state attorneys general who argue that the remedy falls short. According to Bloomberg, the states contend the proposed divestiture does not adequately address the competitive concerns raised by the merger.

The filings show that some potential strategic buyers declined to participate. Extreme Networks and India’s Tech Mahindra passed on submitting bids for Instant On, according to Bloomberg. Fortinet, meanwhile, offered between $5 million and $15 million, per Bloomberg. Another proposal came from technology investors Kevin Duffy and Eric Zimits, who offered just $1 in exchange for spinning the business into a stand-alone company that would still require additional support from HPE.

In their bid, Duffy and Zimits were blunt about the asset’s condition. “The business is not profitable,” they wrote, according to Bloomberg. They also said Instant On had “flat revenue and gross profit margins that are well below industry average,” arguing that HPE’s “lack of management focus” had weakened the business and would require further investment to make it viable as an independent company.

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Related: Federal Judge Lays Out Rules for States Challenging HPE–Juniper Deal

HPE has said in other court filings that Instant On generates roughly $100 million in revenue. But the records reviewed by Bloomberg did not include any HPE response to the outside bidders’ assessment of the unit’s profitability or margin profile.

The company also pushed back on the public disclosure of bidder identities. HPE spokesperson Adam Bauer said in a statement to Bloomberg that the company “will not comment on bidders in the divestiture, who had an expectation of confidentiality and are public only because the state attorneys general violated the judge’s order to file under seal.”

The underlying antitrust case dates to January 2025, when the Justice Department sued to block HPE’s acquisition of Juniper, alleging the transaction would harm competition in enterprise wireless equipment. The government later settled with HPE only days before trial, requiring the company to divest Instant On as part of the resolution.

That fix remains at the center of the states’ objections. The original federal case focused on HPE’s Aruba products and Juniper’s Mist platform, both of which are used by large enterprises, universities and hospitals. Instant On, by contrast, is aimed at small and midsize businesses, offering software to manage access points and devices on Wi-Fi networks. According to Bloomberg, state attorneys general argue that selling Instant On does not replace the lost rivalry between Aruba and Mist in the enterprise segment.

The settlement has also drawn controversy beyond the merger remedy itself. Per Bloomberg, the agreement has been shadowed by allegations that Trump administration officials overrode antitrust staff decisions and struck the deal after lobbying from people close to the president. Those claims have intensified scrutiny of whether the divestiture was designed to solve the competition issues regulators originally identified.

Source: Bloomberg