Hewlett Packard Enterprise (HPE) has announced its intention to acquire Juniper Networks, a networking gear vendor, in an all-cash deal valued at approximately $14 billion, equating to $40 per share. The deal is anticipated to be finalized later this year or in early 2025, according to a statement released by HPE. The announcement follows reports in the Wall Street Journal, which indicated that the companies were in advanced talks.
Following the Journal’s report, Juniper Networks experienced its most significant single-day stock surge in two decades on Tuesday, with shares climbing 22% to close at $37.05. The agreed-upon purchase price of $40 per share represents a 32% premium over Monday’s closing value before the news broke.
HPE expects the acquisition to be accretive to its adjusted earnings per share within the first year of completion. The move is poised to double HPE’s existing networking business, signaling a strategic expansion after years of competitive positioning. In the event of the deal’s completion, Juniper Networks’ CEO, Rami Rahim, would assume leadership of the combined entity and report to HPE’s CEO, Antonio Neri.
Hewlett-Packard significantly strengthened its presence in the networking sector in 2015 through the acquisition of Aruba Networks. Subsequently, the company split into two entities: HPE, focusing on servers and data center equipment, and HP Inc., specializing in PCs and printers.
HPE emphasized that the addition of Juniper to its portfolio is expected to enhance margins and accelerate overall growth. Juniper Networks, founded in 1996, has pursued market share in networking gear, competing notably with Cisco. The company achieved a 12% year-over-year revenue growth in 2022, the fastest since 2010, generating a $76 million profit in the most recent quarter on $1.4 billion in revenue.
In comparison, HPE’s networking segment emerged as the top source of earnings before taxes, contributing $401 million on $1.4 billion in revenue, representing a 41% increase.
The strategic alignment is projected to yield annual cost savings of $450 million within three years post the deal’s completion, as stated by HPE. The details of the acquisition will be discussed in a conference call scheduled for 8:30 a.m. ET on Wednesday.
