Hewlett Packard Enterprise (NYSE:HPE) has confirmed its acquisition of Juniper Networks (NYSE:JNPR) for a staggering $14 billion. The news has sparked a 1% surge in Juniper stock in after-hours trading, while HPE’s shares dipped by 1% postmarket.
The deal, an all-cash transaction, values Juniper at $40 a share, representing a premium of 32% over Monday’s closing price. Juniper Networks stock (JNPR) closed Tuesday at $36.81, underscoring the substantial premium offered by HPE.
The acquisition is aimed at achieving operating efficiencies and generating annual cost synergies of $450 million within 36 months of closing. Additionally, HPE anticipates strong growth in free cash flow and plans to maintain its capital allocation policies, aiming to reduce leverage to approximately 2x within two years post-close.
Following the completion of the deal, Juniper CEO Rami Rahim will assume leadership of the combined networking business, reporting to HPE President and CEO, Antonio Neri.
Antonio Neri expressed the strategic significance of the acquisition, stating, “HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market, providing customers and partners with a new alternative that meets their toughest demands. 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 as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders.”
The companies anticipate closing the deal in late 2024 or early 2025, subject to regulatory approval and the green light from Juniper shareholders. A conference call to discuss the deal is scheduled for Wednesday at 8:30 a.m. ET.