UK Competition and Markets Authority (CMA) I started A formal “phase one” investigation into Hewlett Packard Enterprise’s (HPE) planned acquisition of Juniper Networks.
The CMA said it was in the early stages of assessing whether the deal was likely to “significantly reduce competition within any UK market or markets for goods or services”.
HPE Announce Juniper Networks plans to acquire Juniper Networks again in January 2024, a deal designed to unify their respective strengths in the areas of networking and IT infrastructure, which include servers, storage, consulting, routing, switching and security. As with almost every mega-deal these days, the main motivation behind the merger was — in corporate parlance — to “accelerate AI-driven innovation,” given the critical role cloud infrastructure plays in the burgeoning AI movement.
At the time, HPE said it would pay $40 per share, representing a 32% premium over the last closing price — a total value of $14 billion.
A deal of this size was always likely to attract regulatory scrutiny, and the UK is the first jurisdiction to show its hand, although it is likely that the European Commission will at least take a look at the deal, while the Federal Trade Commission (FTC) is in and likely The United States also raises concerns. Meanwhile, Brazilian regulators have given unconditional approval to the deal in May.
Regulatory barriers are likely to thwart deals in the pipeline. Last year, Adobe was forced to withdraw its $20 billion bid for Figma after both the European Union and the United Kingdom rejected it.
Currently, the CMA is inviting relevant stakeholders to submit their comments, with a deadline of 3 July. The CMA will then have until August 14 to decide whether to advance the investigation to a formal “second stage” investigation.
We’ve reached out to HPE for comment and will update this post when we learn more.