The UK Competition and Markets Authority (CMA) has initiated a formal “Phase 1” investigation into Hewlett Packard Enterprise's (HPE) planned acquisition of Juniper Networks.
The CMA said it is in the early stages of assessing whether the deal is “likely to result in a substantial lessening of competition within any market or markets in the UK for goods or services”.
HPE ai-driven-innovation.html”>Announced plans to acquire Juniper Networks in January 2024, a deal designed to unify their respective strengths in networking and IT infrastructure, spanning servers, storage, consulting, routing, switching and security. As with almost all mega deals these days, one of the main motivations behind the merger was to (in corporate parlance) “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 most recent closing price, equating to a total value of $14 billion.
A deal of this magnitude was always likely to attract regulatory scrutiny, and the UK is the first jurisdiction to show its hand, although the European Commission is likely to at least take a look at the deal, while the Federal Trade Commission ( FTC) in the United States could also raise concerns. Meanwhile, Brazilian regulators gave unconditional approval to the deal. In May.
Regulatory hurdles can potentially derail deals in the pipeline. Last year, Adobe was forced to cancel its $20 billion bid for Figma after rejection in both the EU and the UK.
For now, the CMA is seeking comments from relevant stakeholders, with a deadline set for July 3. The CMA will have until August 14 to decide whether to progress the investigation to a formal “phase 2” investigation.
We have contacted HPE for comment and will update this post as we learn more.
