US Justice Department Moves to Block HPE’s $14 Billion Juniper Acquisition

The U.S. Department of Justice (DOJ) has taken legal action to prevent Hewlett Packard Enterprise Co. (HPE) from proceeding with its $14 billion acquisition of Juniper Networks Inc., citing concerns over reduced competition in the enterprise wireless equipment market. According to Bloomberg, the DOJ filed a complaint on Thursday in a California federal court, arguing that the merger would significantly consolidate the sector, leaving only two dominant players—HPE and Cisco Systems Inc.—in control of 70% of the market.

The lawsuit represents the first antitrust challenge initiated by the DOJ under President Donald Trump’s administration. Per Bloomberg, the move signals a continuation of the aggressive stance on corporate mergers that was pursued under President Joe Biden’s tenure.

According to the DOJ’s complaint, the merger would eliminate direct competition between HPE and Juniper, which has historically led to lower prices and greater investment in network management software. The agency contends that the acquisition would lessen HPE’s incentive to offer discounts and innovate, ultimately harming businesses, universities, and hospitals that rely on enterprise networking solutions. Both HPE and Juniper, like their larger competitor Cisco, manufacture networking equipment such as routers and switches, which facilitate the flow of information across the internet and within organizations.

Related: HPE, Juniper in High-Stakes Talks with DOJ Over Antitrust Concerns

The DOJ highlighted that competition from Juniper has pressured HPE to reduce prices and enhance its product offerings, particularly in response to Juniper’s Mist product line. Internal documents referenced in the complaint reveal that HPE’s sales teams were specifically trained to counter Juniper’s influence in the market. Executives within HPE reportedly expressed concerns over Juniper’s rapid growth, with one describing the company’s expansion as “concerning for me.” In 2021, another HPE sales leader urged teams to “KILL MIST!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!”

According to Bloomberg, the DOJ asserts that after failing to outperform Juniper through competition, HPE opted to acquire the company instead. The agency argues that this strategic shift underscores the anticompetitive nature of the deal.

HPE has positioned itself as a provider of enterprise-focused technology since its split from Hewlett-Packard in 2015, specializing in high-performance computing, data center networking, and cloud services. The company has yet to publicly respond to the DOJ’s lawsuit.

Executives from HPE and Juniper reportedly met with DOJ antitrust officials earlier this week to discuss concerns surrounding the deal, Bloomberg reports. While the transaction has faced scrutiny in the U.S., it has already received unconditional approval from the European Union, which determined that the merger would not significantly impact competition in its markets. Similarly, the UK Competition and Markets Authority has also cleared the deal.

Source: Bloomberg