HP Enterprises to Acquire Juniper Networks for $14 Billion

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The acquisition is expected to be beneficial to HPE’s non-GAAP earnings and free cash flow in the first year following the completion of the deal.

Hewlett Packard Enterprise (HPE) has announced its plan to acquire Juniper Networks, a renowned networking gear manufacturer, for $14 billion in an all-cash transaction. This acquisition is a strategic move by HPE to enhance its offerings in the field of artificial intelligence (AI).

HPE has proposed an offer of $40 per share to Juniper shareholders, which is a 32.4% premium over Juniper’s closing stock price on the day before the announcement. The transaction will be financed through $14 billion in term loans. The deal is anticipated to close towards the end of 2024 or early 2025, pending regulatory approvals.

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The acquisition is expected to be beneficial to HPE’s non-GAAP (Generally accepted accounting principles) earnings and free cash flow in the first year following the completion of the deal. J.P. Morgan Securities LLC and Qatalyst Partners are serving as financial advisors to HPE for this transaction.

The acquisition aims to bolster HPE’s AI capabilities and is expected to double its networking business. This move comes as HPE seeks to diversify and strengthen its portfolio amid challenges in its traditional server business.

Juniper Networks is known for its network security products and AI-enabled enterprise networking operations (AIOps). HPE’s acquisition is targeted at leveraging these advanced capabilities to enhance its own product offerings.

Juniper has been facing weak demand from wireless carriers and cable operators affected by inflation. It has encountered strong competition in the networking space from companies like Cisco Systems and Nvidia.

Following the announcement, Juniper’s shares saw a modest increase of 0.5% in extended trading, while HPE’s shares remained largely unchanged.

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