March 31, 2025 | Technology | North America | Active
HPE’s $14bn acquisition of Juniper is a landmark deal in enterprise networking, but it is facing significant regulatory risk in the US. The Department of Justice (DoJ) has moved to block the proposed merger, with a lawsuit filed on 30-Jan-25, arguing that it would hurt competition, drive up prices, and slow innovation, specifically in the enterprise wireless LAN (“WLAN”) market. The case will be heard in the US District Court for the Northern District of California, with an expedited trial scheduled to begin on 9-Jul-25. The merger agreement includes an $815m reverse termination fee, and the termination date is currently 9-Oct-25. In this report, we assess the DoJ’s case as slightly stronger overall, particularly on market share and HHI statistics, and its theory of Juniper as a “maverick” competitor. However, the case is far from clear-cut. Our analysis indicates that the outcome will likely depend on whether the DoJ can persuade the court to accept its narrow, US-specific market framing, which would give it the benefit of a structural presumption of harm. If it can do so, the burden will shift to HPE to prove that the deal won’t hurt competition – a high bar that merging parties rarely meet. We assess the strength of both sides’ arguments, drawing on past merger cases and views from antitrust lawyers. The case raises familiar tensions seen in past deals: whether the government can successfully define a narrow market, and whether removing an aggressive pricing rival like Juniper is enough to justify blocking the deal. Much will depend on how the judge weighs structural indicators like market concentration, alongside real-world evidence, from customer complaints to internal documents. We also consider two alternative outcomes: settlement and termination. On settlement, there’s little sign of movement so far. HPE has made clear ...
Contents
Please contact us to request access to this report.