Hewlett Packard Enterprise (HPE) announced a definitive agreement to acquire Juniper Networks. HPE will acquire Juniper in an all-cash transaction for $40.00 per share, representing an equity value of around $14 billion.

The acquisition will double HPE's networking business, creating a new networking leader with a vast portfolio that offers customers and partners a new driving force for business value. The constant growth of AI and hybrid cloud-driven businesses has increased the demand for secure, unified technology solutions. HPE is aligning its portfolio to capitalise on these significant IT trends, with networking as a crucial connectivity component.

Combining HPE's and Juniper's complementary portfolios will strengthen HPE's edge-to-cloud strategy with the capacity to lead in an AI-native environment based on cloud-native architecture. This merger will deliver enterprise customers with a secure, complete portfolio that enables the networking architecture necessary to manage and simplify their expanding and complex connectivity needs. With industry-leading AI, the combined company is expected to create better user and operator experiences, benefiting customers' high-performance networks and cloud data centres.

Juniper Networks offers a selection of cloud-delivered networking solutions, software, and services, including the Mist AI and Cloud platform. It helps organisations securely and efficiently access the crucial cloud infrastructure that forms the basis of digital and AI strategies. The combination with HPE Aruba Networking and HPE AI interconnect fabric will merge enterprise reach, and cloud-native and AI-native management and control. This alliance will create a premier industry player that will accelerate innovation and deliver further modernised networking optimised for hybrid cloud and AI.

Rami Rahim, the CEO of Juniper, will lead the combined HPE networking business, reporting to HPE President and CEO Antonio Neri. "HPE's acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market. 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", Neri shared. Rahim echoed these sentiments, adding that joining HPE would "accelerate the next phase of our journey."

The acquisition also leads to strategic benefits such as a compelling pro-forma financial profile and positioning HPE for long-term growth for shareholders and greater investment capacity. With Juniper, HPE's portfolio would be weighted towards higher-growth, higher-margin businesses with significant free cash flow potential. This would enable HPE to enhance shareholder return and allow additional investments in high-growth areas such as AI and cloud.

The transaction is anticipated to close in late 2024 or early 2025, pending regulatory approvals, approval of the transaction by Juniper shareholders, and other customary closing conditions. The combination is expected to generate operating efficiencies and run-rate annual cost synergies of $450 million within 36 months post-close.