Hewlett Packard Enterprise to buy Juniper Networks in $14 billion deal

Hewlett Packard to buy networking gear maker Juniper in all-cash deal for $14 billion to spruce AI networking

Hewlett Packard Enterprise will buy networking gear maker Juniper Networks for $14 billion in an all-cash deal, in an attempt to spruce up the company's artificial intelligence (AI) offerings.

HPE offered $40 per share to Juniper shareholders, the companies said on Tuesday. That represents a 32.4% premium to the stock's close on Monday, when the news of the deal first emerged.

The acquisition comes at a time when the AI gold rush has led companies to pour billions of dollars into upgrading and developing new wares and is expected to double HPE's networking business.

HPE, grappling with sluggish demand in its traditional server business, is looking to tap into Juniper's offerings such as network security and AI-enabled enterprise networking operations (AIOps).

Weak demand from inflation-hit wireless carriers and cable operators, as well as stiff competition from Cisco Systems and Nvidia in the networking space has been a drag on Juniper.

Shares of Juniper were up 0.5% in extended trading after the bell, while those of HPE were largely flat.

The deal is expected to be accretive to HPE's non-GAAP earnings and free cash flow in the first year post completion, the companies said.

The transaction is expected to be funded through financing commitments for $14 billion in term loans and is likely to close in late 2024 or early 2025, subject to regulatory approvals.

J.P. Morgan Securities LLC and Qatalyst Partners are serving as HPE's financial advisors.