The American technology company Hewlett-Packard HPE acquired Juniper Networks for network equipment for 14 billion dollars, in an all-cash deal.
Hewlett-Packard expected the acquisition to double its network business, noting that the growing demand for artificial intelligence and hybrid cloud-based businesses requires secure and unified technical solutions that connect corporate data.
Hewlett-Packard expanded into networking when it bought Aruba Networks in 2015 and, months later, split in two, creating HPE, which sells servers and other equipment for data centers, and HP, which manufactures computers and printers.
The company said in a statement that the addition of American Juniper to its portfolio would boost profit margins and accelerate growth, expecting the deal to be completed late this year or in early 2025.
If completed, Juniper CEO Rami Rahim will lead the combined group and report to HPE CEO Antonio Neri, according to the statement.
HPE also indicated that this cooperation will lead to annual cost savings of 450 million dollars within three years of the completion of the transaction. The transaction is expected to be financed by financing commitments of USD 14 billion in the form of term loans
Juniper’s stock experienced its best day in 20 years on Tuesday after reports of the deal appeared, rising by 22% to close at 37.05 dollars, and after the official announcement of the deal on Wednesday, it rose by 1% in pre-market trading.
Founded in 1996, Juniper’s revenue grew 12% year-on-year in 2022, the fastest growth since 2010.
Weak demand from wireless carriers and cable operators affected by inflation, as well as stiff competition from Cisco Systems and Nvidia in the networking business, served as a hindrance for Juniper.
HPE, which is experiencing a slowdown in demand in its traditional server business, is looking to leverage Juniper in the implementation of artificial intelligence-enabled enterprise networks (AIOps).