HPE hopes to close the deal by the end of this year or early 2025. The announcement comes a day after the WSJ reported that the two companies were in final discussions.
Juniper shares had their biggest one-day gain in 20 days on January 9 following the WSJ article, jumping 22% to nearly $37.05.
The acquisition would double HPE’s existing networking business after years of competition. If completed, Juniper CEO Rami Rahim would lead the combined business and report to HPE CEO Antonio Neri.
Hewlett-Packard (HP) delved into the networking business after acquiring Aruba Networks in 2015. A few months later, HP split into two companies, resulting in the creation of HPE, which sells servers and other equipment for data centers, and HP Inc, which makes personal computers and printers.
HPE said adding Juniper to its portfolio would strengthen margins and boost growth. Founded in 1996, Juniper spent years chasing Cisco in the networking equipment market.
In 2022, the company's revenue grew 12% year over year. In the most recent quarter, Juniper reported a profit of $76 million on revenue of $1.4 billion, down 1% from the same period last year.
HPE's networking equipment segment was the company's largest source of pre-tax income, with earnings of $401 million on revenue of $1.4 billion, up 41%.
According to HPE, the merger will help both sides reduce annual costs by $450 million within three years of completing the deal.
(According to CNBC)
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