As we mentioned yesterday in a still unconfirmed report, HPE will acquire Juniper Networks in an all-cash transaction for $40.00 per share, representing an equity value of approximately $14 billion, even one billion more than we indicated yesterday. With the acquisition, HPE’s networking business is anticipated to double, establishing a new networking leader with a broad portfolio for its partners and customers.
The combination of HPE and Juniper would accelerate HPE’s plan for sustained, profitable development by strengthening its high-margin networking business and advancing the company’s portfolio mix shift toward higher-growth solutions.
After the deal closes, Rami Rahim, CEO of Juniper, will take over as head of the merged HPE networking division, reporting to Antonio Neri, President and CEO of HPE.
“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” said Antonio Neri. “This transaction will strengthen HPE’s position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders. I am excited to welcome Juniper’s talented employees to our team as we bring together two companies with complementary portfolios and proven track records of driving innovation within the industry.”
Artificial Intelligence, Hybrid Cloud
“By joining HPE, I believe we can accelerate the next phase of our journey,” said Rami Rahim, CEO at Juniper Networks.According to HPE, the need for safe, unified technology solutions that link, safeguard, and analyze businesses’ data from edge to cloud is accelerating due to the rise of artificial intelligence and hybrid cloud-driven businesses. These trends, and AI specifically, would continue to be the most disruptive workloads for companies. HPE claims to position its portfolio to take advantage of these significant IT advancements, with networking serving as a vital connecting element.
By fusing the complementing portfolios of Juniper Networks and HPE, HPE’s edge-to-cloud strategy would be enhanced, enabling it to take a lead in an AI-native environment thanks to a solid cloud-native architecture. When HPE and Juniper work together, they can provide businesses of all sizes a comprehensive, secured portfolio that would make networking architecture manageable and easier to use for their ever-growing and more complicated connection requirements. The merged business is anticipated to improve operator and user experiences by using industry-leading AI, which will help clients’ cloud data centers and high-performance networks.
Juniper Networks assists enterprises in gaining access to the mission-critical cloud infrastructure that forms the basis of digital and artificial intelligence (AI) plans via its range of cloud-delivered networking solutions, software, and services, which includes their Mist AI and Cloud platform. Combining enterprise reach with cloud-native and AI-native management and control with HPE Aruba Networking and the specially created HPE AI interconnect fabric would make this company a leading force in the market, accelerating innovation to deliver further modernized networking optimized for hybrid cloud and AI.
“Our multi-year focus on innovative, secure AI-native solutions has driven Juniper Networks’ outstanding performance,” said Rami Rahim, CEO of Juniper Networks. “We have successfully delivered exceptional user experiences and simplified operations, and by joining HPE, I believe we can accelerate the next phase of our journey. In addition, this combination maximizes value for our shareholders through a meaningful all-cash premium. We look forward to working with the talented HPE team to drive innovation for enterprise, service provider and cloud customers across all domains, including campus, branch, data center and the wide area network.”
Within 36 months of closing, the merger is anticipated to generate $450 million in run-rate annual cost savings and operational improvements.
It is anticipated that the acquisition will be funded by financial commitments for term loans totaling $14 billion. In the end, a mix of new debt, obligatory convertible preferred shares, and cash on the balance sheet will partially replace this funding. As long as governmental clearances are received, Juniper shareholders approve the deal, and other customary closing conditions are met, the transaction is presently anticipated to occur in late 2024 or early 2025.
