US Justice Department Sues to Block HPE's Juniper Networks Acquisition

Summary:

The US Justice Department has filed a lawsuit to block Hewlett Packard Enterprise's (HPE) $14 billion acquisition of Juniper Networks. The government alleges that the merger would reduce competition in the enterprise wireless equipment market.

Key Points:

* The deal would consolidate the sector from three major players to two, with HPE and Cisco controlling 70% of the market.
* The Justice Department argues that the merger would harm competition and innovation in network management software.
* HPE was reportedly forced to discount its products and develop new features to compete with Juniper before the acquisition was announced.
* The lawsuit is the first antitrust action brought by the Justice Department under President Donald Trump.

Market Impact:

* HPE shares dropped as much as 6% after the announcement of the lawsuit.
* Juniper shares fell 3%.

Background:

* HPE and Juniper, along with Cisco, are major manufacturers of networking devices used in businesses and organizations.
* The acquisition was approved unconditionally in the EU and by the UK Competition and Markets Authority.

Quotable:

"Having failed to beat Mist on the merits, HPE changed tactics and in January 2024 opted to try to buy Juniper instead," the Justice Department said in its complaint.

Sources:

* Bloomberg (https://www.bloomberg.com/news/articles/2025-03-02/us-justice-department-sues-to-block-hpe-s-juniper-networks-deal)