HPE will pay $14 billion to acquire Juniper Networks

Hewlett Packard Enterprise announced that it has reached an all-cash agreement to acquire Juniper Networks, a provider of networking gear, for approximately $14 billion, or $40 per share.

According to a statement from the company, HPE anticipates closing the deal either in early 2025 or late this year. The Wall Street Journal had revealed the companies were in late-stage negotiations the day before the announcement.

Tuesday saw the greatest day for Juniper shares in twenty years following the Journal report indicating that a deal might be announced this week. At $37.05., the shares closed up 22%. At $40 per share, the purchase price represents a 32% premium over Monday’s closing price before the Journal story’s publication.

In the first year following its closing, HPE stated that the transaction would be accretive to its adjusted earnings per share.

After years of competition, the acquisition would double HPE’s current networking business. According to the statement, Rami Rahim, CEO of Juniper, would oversee the merged organization and answer to Antonio Neri, CEO of HPE, if it is successful.

In 2015, Hewlett-Packard expanded its network expertise by acquiring Aruba Networks. A few months later, HP split into two companies: HP Inc., which manufactures PCs and printers, and HPE, which sells servers and other equipment for data centers.

According to HPE, including Juniper in its portfolio will increase growth and boost margins.

After its founding in 1996, Juniper pursued Cisco for a long time in the networking equipment market. In 2022, revenue increased by 12% annually, which was the fastest growth since 2010. Juniper managed to turn a $76 million profit on $1.4 billion in revenue in the latest quarter, a 1% decrease from the same period last year.

The networking segment of HPE accounted for the majority of the company’s earnings before taxes, with $401 million on $1.4 billion in revenue—a 41% increase.

According to HPE, collaborating would result in yearly cost savings of $450 million within three years of the deal’s completion.

On Wednesday at 8:30 a.m. ET, the two companies will hold a conference call to discuss the deal.

HPE was advised by JPMorgan and Qatalyst, the statement said.