DOJ Sues to Block Hewlett Packard Enterprise’s $14 Billion Juniper Deal
The U.S. Department of Justice has filed a lawsuit to block Hewlett Packard Enterprise’s (HPE) proposed $14 billion acquisition of networking equipment company Juniper Networks, citing concerns over reduced competition in the industry.
According to the complaint filed on Thursday, the DOJ argues that the deal would consolidate control of over 70% of the U.S. networking equipment market between just two companies – HPE and Cisco Systems – stifling innovation and driving up costs for consumers.
Following news of the lawsuit, shares of both HPE and Juniper Networks saw a decline of more than 3% in afternoon trading. This marks the first major antitrust lawsuit under President Donald Trump’s new administration.
HPE had announced its all-cash deal to acquire Juniper Networks over a year ago, aiming to strengthen its artificial intelligence-driven networking solutions. The companies have defended the merger, claiming that combining their offerings would enhance competition and create more advanced networking solutions.
However, the DOJ argues that Juniper’s presence in the market has pressured HPE to lower prices and invest in innovation, citing Juniper’s impact on reducing the cost of operating wireless networks. The lawsuit claims that instead of competing with Juniper’s Mist product, HPE opted to acquire the company to eliminate a key rival.
Despite the legal challenge in the U.S., regulatory bodies in the United Kingdom and the European Union have already approved the deal. As the case unfolds, HPE and Juniper are expected to continue their efforts to push the merger forward while the DOJ seeks to block it in court.