Citing higher growth and higher margin opportunities for modernized networking optimized for hybrid cloud and AI, Hewlett Packard Enterprise (HPE) confirmed plans to acquire Juniper Networks for $40.00 per share in cash, representing an equity value of approximately $14 billion and a 32% premium over the unaffected closing price of Juniper’s common stock on January 8, 2024.
HPE saysJuniper’s complementary portfolios supercharges its own edge-to-cloud strategy with an ability to lead in an AI-native environment based on a foundational cloud-native architecture.
The combined company will target next-generation AI-native networking and enable new digital experiences through secure, intelligent connectivity. Networking will become the new core business and architecture foundation for HPE’s Hybrid Cloud and AI solutions delivered through our HPE GreenLake hybrid cloud platform.
“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” said Antonio Neri, CEO of HPE. “This transaction will strengthen HPE’s position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders. I am excited to welcome Juniper’s talented employees to our team as we bring together two companies with complementary portfolios and proven track records of driving innovation within the industry.”
“Our multi-year focus on innovative, secure AI-native solutions has driven Juniper Networks’ outstanding performance,” said Rami Rahim, CEO of Juniper Networks. “We have successfully delivered exceptional user experiences and simplified operations, and by joining HPE, I believe we can accelerate the next phase of our journey. In addition, this combination maximizes value for our shareholders through a meaningful all-cash premium. We look forward to working with the talented HPE team to drive innovation for enterprise, service provider and cloud customers across all domains, including campus, branch, data center and the wide area network.”
Some highlights:
- Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting to HPE President and CEO Antonio Neri.
- On a pro forma basis, the new networking segment will increase from approximately 18% of total HPE revenue as of fiscal year 2023 to approximately 31%[1] and contribute more than 56%1,[2] of HPE’s total operating income.
- The transaction is expected to be funded based on financing commitments for $14 billion in term loans, which will ultimately be replaced, in part, with a combination of new debt, mandatory convertible preferred securities, and cash on the balance sheet.
- The combined company is expected to achieve operating efficiencies and run-rate annual cost synergies of $450 million within 36 months post close.
- The acquisition is currently expected to close in late calendar year 2024 or early calendar year 2025.
From HPE's Q4 2023 financial presentation
From Juniper's Q3 2023 financial presentation
