Hewlett Packard Enterprise (HPE) has announced it will acquire networking product maker Juniper Networks for $14bn in an all-cash deal, as the company looks to diversify its AI product offerings.
HPE is an enterprise technology business created in 2015 when it split from Hewlett Packard Inc’s PC and printer business. HPE is reportedly offering $40 per share to Juniper shareholders, the companies said on Tuesday (10 January).
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The acquisition comes amid a rapidly developing AI market since the release of ChatGPT in November 2022, as companies across the industry increasing expenditure to bolster their own AI capabilities.
HPE said the acquisition will double its networking business and the company is looking to make use of Juniper’s AI-enabled enterprise networking operations and security.
Emir Halilovic, research director for telecom technology & software at research company GlobalData said: “The proposed acquisition will significantly boost HPE’s presence in telecom network equipment provider ecosystem.
“On the other hand, it completes successful transformation of Juniper into technology provider to cloud service providers, telcos, and enterprises – with telco likely playing a secondary role for HPE networking business going forward.”
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By GlobalDataRussell Crampin, managing director at Axians UK, told Verdict that several factors made now an opportune moment for Juniper to sell.
Crampin noted Juniper’s “significant growth in the AI-driven enterprise market” and “the ongoing demand from large cloud and service providers for continuous improvements in networking scalability and performance”.
Alex Mesguich, chief sales officer at Context, told Verdict that the acquisition could be a move to disrupt rival Cisco’s stronghold in the enterprise sector.
“The emphasis on AI technology in this process could underscore a deliberate effort to set HPE apart, introducing their advanced AI capabilities to the mid-market and below,” Mesguich said.
The acquisition follows several other major plays in the enterprise IT market, including Broadcom‘s $69bn acquisition of cloud company VMware in November and Cisco’s Splunk acquisition for $28bn in September.
Juniper Networks CEO Rami Rahim said: “AI is here. And it’s here in a big way.”
“I believe it’s the biggest inflection since the dawn of the Internet itself – with implications for how we live, work and play, as well as the technology we make,” Rahim said.
Antonio Neri, HPE president and CEO, said: “HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market.”
HPE reported revenues of $29.1bn for the fiscal year ended October 2023, an increase of 2.2% over 2022, according to GlobalData’s company database.
