The UK’s Competition and Markets Authority (CMA) has said it is investigating HPE’s planned acquisition of Juniper Networks.
The CMA said it is considering whether the deal will “result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002”.
A key aim of this probe is to examine whether the merger of the two companies could result in a “substantial lessening of competition” within relevant markets in the UK, the watchdog added.
To assist it with this assessment, the CMA is asking for comments on the transaction from any interested party. The CMA has until 14 August to decide whether to refer the deal for a ‘phase two’ investigation.
HPE announced its intention to buy Juniper Networks in January for $40 a share, or $14 billion, saying that the deal would help it shift towards higher-growth offerings and strengthen its high-margin networking business
At the time, HPE said the deal would double its networking business, creating a “new networking leader with a comprehensive portfolio that presents customers and partners with a compelling new choice to drive business value”.
HPE said that with Juniper, its portfolio will be weighted toward higher-growth, higher-margin businesses.
Announcing the proposed deal, it said networking accounted for about 18% of total HPE revenue, but with the acquisition of Juniper this would grow to 31% and contribute more than 56% of HPE’s total operating income.
AI was a key factor in the deal as well, analysts told ITPro at the time, both in terms of the opportunity to build out data center infrastructure to support data-intensive AI workloads, but also the opportunity to use AI to improve network management.
In a statement given to ITPro, HPE said it plans to work closely with the CMA to clarify the terms of the deal.
“We can confirm the UK Competition and Markets Authority has accepted our filing as part of the standard process to review the proposed acquisition of Juniper Networks in several jurisdictions,” the company said.
“We are working to complete all necessary reviews and secure clearance quickly and efficiently so that we can begin delivering value to our customers as soon as possible. We continue to expect to close by the end of calendar year 2024 or early 2025.”
The launch of the probe comes as HPE hosts its annual flagship event, HPE Discover, in Las Vegas this week.
You can keep tabs on all the latest news and updates from the event in our live blog.
