Hewlett Packard Enterprise to buy Juniper Networks in $14 bln deal. To improve its artificial intelligence (AI) products, Hewlett Packard Enterprise (HPE.N) will acquire networking equipment manufacturer Juniper Networks (JNPR.N) for $14 billion in an all-cash transaction.
Juniper stockholders received an offer from HPE of $40 per share on Tuesday, the firms said. That is a 32.4% premium over the closing price of the shares on Monday, the day the deal’s announcement was made public.
The acquisition is anticipated to quadruple HPE’s networking business at a time when the AI gold rush has prompted businesses to invest billions of dollars in modernizing and creating new products.
With demand for its core server business slowing down, HPE attempts to use Juniper’s solutions in AI-enabled corporate networking operations (AIOps) and network security.
Due to fierce competition from Cisco Systems (CSCO.O) and Nvidia (NVDA.O) in the networking market, as well as weak demand from cable operators and cellular carriers who are struggling with inflation, Juniper has suffered.
After the bell, Juniper’s shares increased by 0.5% in extended trading, while HPE’s remained almost unchanged.
According to the firms, the purchase should positively impact HPE’s non-GAAP earnings and free cash flow in the first year after completion.
The acquisition is anticipated to occur in late 2024 or early 2025, pending regulatory clearances, and will be financed by financing commitments for $14 billion in term loans. HPE’s financial consultants are Qatalyst Partners and J.P. Morgan Securities LLC.
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