HPE completes Juniper Networks deal to boost AI & cloud focus
Hewlett Packard Enterprise has completed its acquisition of Juniper Networks in a move aimed at expanding its networking, artificial intelligence and hybrid cloud capabilities.
The acquisition sees HPE's networking business double in size and provides customers with access to a broader range of solutions across cloud-native and AI-driven technologies. The agreement is expected to shift HPE's portfolio towards higher-growth, higher-margin segments while supporting long-term profit growth for the company.
Business transformation
HPE stated that the integration of Juniper Networks will strengthen its ability to address evolving demands in enterprise technology, particularly as AI and hybrid cloud adoption increases among customers.
"Today begins a new era for HPE - we are now at the epicentre of the transformation of IT, where AI and networking are converging," said Antonio Neri, President and CEO of HPE. "In addition to positioning HPE to offer our customers a modern network architecture alternative and an even more differentiated and complete portfolio across hybrid cloud, AI, and networking, this combination accelerates our profitable growth strategy as we deepen our customer relevance and expand our total addressable market into attractive adjacent areas. We look forward to welcoming the Juniper team to HPE."
The transaction significantly increases the company's reach into adjacent markets such as data centres, firewalls, and routers. It bridges HPE's focus on enterprise security-first networking and SASE security with Juniper's existing presence in data centres, service provider solutions, and AI-native systems.
Rami Rahim, previously Chief Executive Officer of Juniper Networks, will assume leadership of the combined HPE Networking business. He commented on the opportunity for the merged entity to address shifting requirements in the sector.
"HPE and Juniper have a unique opportunity to disrupt the networking industry at the most important and relevant time," said Rami Rahim. "Together, we'll be able to provide customers and partners with a secure network that is purpose-built with AI and for AI."
Customer offering
HPE's expanded networking business will offer customers a modern architecture to manage and simplify complex connectivity needs, especially those linked to data-intensive workloads in hybrid and AI environments. The company expects the combined expertise to increase research and development scale, resulting in quicker updates across networking silicon, systems, and software.
The merger also provides customers with access to HPE's portfolio covering networking, hybrid cloud, storage, compute, and software. The intention is to help accelerate and streamline AI transformations for organisations of all sizes, while benefiting from HPE's established global sales reach.
Financial impact
HPE expects the acquisition of Juniper — described in the announcement as a high-margin business — to be accretive to its non-GAAP earnings per share in the first year following completion. According to the company, the combined networking business is projected to contribute over 50% of total company operating income.
Juniper Networks' common stock will cease trading, and its shares will no longer be listed on the New York Stock Exchange following the conclusion of the transaction.
Transaction background
Financial advisory for HPE was provided by J.P. Morgan Securities and Qatalyst Partners, with legal advice from several law firms. Juniper's financial advisor was Goldman Sachs, with Skadden, Arps, Slate, Meagher & Flom providing legal counsel.
This acquisition forms part of HPE's ongoing strategy to enhance its position in cloud and AI-centred enterprise technology and address the increasing complexity of customer connectivity requirements.
