HPE-Juniper Met With DOJ To Prevent Antitrust ‘Challenge’ To $14B Deal: Report

HPE partners tell CRN that they have already put together significant sales efforts around the HPE-Juniper combination and that an antitrust challenge would put at risk tens of millions of dollars in potential networking and AI revenue gains.

Hewlett Packard Enterprise and Juniper Networks representatives met with U.S. Department of Justice (DOJ) regulators last week in a bid to prevent an antitrust challenge to HPE’s proposed $14 billion acquisition of Juniper, according to a Bloomberg news report.

DOJ officials, Bloomberg reported, are ready to “challenge the deal if necessary and have made their concerns known” to HPE and Juniper, but no final decision on whether to bring a lawsuit has been reached.

“Hewlett Packard Enterprise and Juniper Networks are working with regulators to obtain the necessary approvals for our proposed deal and expect the deal to close by the end of 2024 or beginning of 2025,” HPE said in a statement in response to the Bloomberg story. “We believe the transaction will create significant benefits for customers and fundamentally change the dynamics of the networking sector for the better by promoting more competition and innovation.”

CRN also reached out to Juniper Networks and the DOJ, but had not heard back at press time.

Bloomberg reported that a decision on whether to challenge the deal could be made as soon as this week. The media outlet also reported that HPE and Juniper “may choose to delay the deal until President-elect Donald Trump’s administration takes over in January in the hopes of a more favorable view” of the deal.

C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company and a top HPE and Aruba partner, said if the deal is not completed it would cost his company “tens of millions of dollars” in potential networking as a service and AI sales opportunities that would come with an HPE-Juniper deal.

“We had already put together an aggressive sales effort for next year based on the HPE Juniper acquisition,” said Howdyshell. “(HPE CEO) Antonio (Neri) has already declared that HPE was going to be a networking company. We believe we would miss out on a significant opportunity if this deal is not approved. This was a focused initiative for us for next year. We have already put the wheels in motion on this.”

Howdyshell said he sees the HPE-Juniper deal providing a much-needed shot in the arm to the networking and AI markets. “I am not sure what the thinking is behind the potential DOJ challenge,” he said.

Howdyshell said he would expect HPE and Juniper to receive a more attractive regulatory review from the incoming Trump administration.

“I would expect them to wait for the new administration to take office,” he said. “That just makes sense. Now you would have business people making the decision on that point as to what is fair for business.”

Rob Schaeffer, president and chief revenue officer of e360, a top HPE partner based in Concord, Calif., No. 128 on the 2024 CRN SP500, said he would also be disappointed if the HPE-Juniper deal does not receive regulatory approval given the potential networking and AI sales opportunities it would open up for e360.

“I don’t know any of the details on why the DOJ would challenge this,” he said. “I don’t see how it would be antitrust given there is significant competition in the networking space not just from Cisco, but from other networking companies. While the combination of HPE-Aruba and Juniper is very strong and interesting I don’t know that it would have market dominance that would present any issues for the government.”

Schaeffer said he would expect that deal to provide significant opportunities for e360 given that networking is the largest part of the company’s business.

“We would like to see this deal go through,” he said. “We were planning a significant sales effort around HPE-Aruba-Juniper for the new year.”

In a blog post last February, Neri said the proposed $14 billion acquisition of Juniper Networks was aimed at disrupting the networking “status quo” with a new modern AI-driven networking fabric.

“We are pursuing this acquisition because we believe the combination of HPE and Juniper Networks will radically change the networking industry – not by eliminating products from either portfolio – but by creating greater choice in this sector,” said Neri in a blog post that addresses the potential competitive impact of the deal. “The incredible thing about a combination like this one is that there are strong offerings on both sides and by bringing them together, we will be accelerating value and flexibility for all of our customers.”

Without directly singling out rival Cisco, which has maintained a dominant position in the networking industry since the mid-1990s, Neri said the deal takes aim at the current networking status quo.

“Our objective is to better address customer challenges by integrating two of the most innovative and competitive organizations in the networking industry and disrupt the status quo,” said Neri. “Our combined business will create a new full-service networking company, with a customer-centric approach to product development and a comprehensive portfolio that delivers value for our customers.”