DOJ Antitrust Concerns Cast Shadow Over HPE's $14 Billion Bid for Juniper Networks

Sources indicate that Hewlett Packard Enterprise (HPE) has engaged in discussions with U.S. Department of Justice (DOJ) antitrust officials regarding its proposed $14 billion acquisition of networking equipment maker Juniper Networks.

Representatives from both HPE and Juniper met with Omeed Assefi, the acting head of antitrust enforcement at the DOJ, to address the department's concerns over the acquisition. These discussions are confidential, prompting sources to maintain anonymity.

The DOJ has expressed apprehensions that the merger could stifle competition with industry leader Cisco. While the networking market includes several smaller competitors, the DOJ views HPE and Juniper as key innovators whose merger could diminish competitive pressures on Cisco.

Despite these concerns, HPE's CEO Antonio Neri remains optimistic, having voiced at the World Economic Forum in Davos that he sees no reason for the deal's rejection.

The DOJ is reportedly ready to proceed with a lawsuit should HPE and Juniper attempt to finalize the merger this week. The decision to litigate rests with senior officials appointed by the Trump administration, as some Biden-era decisions have been overturned.

Under an agreement with the DOJ, the companies have opted not to finalize the transaction by the end of this week, potentially extending the timeline to allow Gail Slater, a Trump nominee for head of antitrust, to review the case. Her appointment is pending Senate confirmation.

Other scenarios include possible DOJ approval with certain conditions to alleviate competitive concerns. The merger agreement between HPE and Juniper is set to last until October 2025, providing ample time for negotiation.

While the U.K. and the EU have given their nods to the deal, the DOJ has been conducting a thorough investigation into this acquisition since last year.