European Regulator Gives Go-Ahead to HPE’s Acquisition of Juniper

The European Commission (EC) has given the greenlight to HPE‘s planned acquisition of Juniper Networks.

The EC was investigating the proposed deal, but concluded it “would raise no competition concerns in the European Economic Area.”

HPE first announced its plans to acquire Juniper in January, for $14 billion. Then, HPE CEO Antonio Neri said moving forward, the network “will be the core foundation” of the new company. Juniper’s portfolio includes routing, switching, Wi-Fi, network security, AI-enabled enterprise networking operations (AIOps) and software-defined networking (SDN).

The acquisition of Juniper would also bolster HPE’s AI offerings. Juniper acquired Mist Systems in 2019, introducing AI to Juniper’s cloud-managed wireless network. Mist has since become the jewel in Juniper’s crown and the company often cites it as a key differentiator against its competitors.

Juniper has said that HPE wants to leverage Mist to take on rival Cisco.

Acquisition Would Not 'Reduce Competition' in Supply Of Networking Equipment

The Commission’s investigation assessed whether the combined company would impact competition in the supply of wireless local area network (WLAN) equipment, wireless access points (WAP), Ethernet campus switches and data center switches.

Related:Juniper Preparing to Battle Cisco with Acquisition by HPE

Its investigation concluded that the transaction would not significantly reduce competition in such markets. In particular, concerning the horizontal overlaps between the companies’ activities in the WLAN, WAPs and Ethernet campus switches, the Commission found that in Europe, the merged entity “would continue to face competition from a wide range of competitors, including strong and established players on each of the markets.”

It also noted that HPE and Juniper “are not each other’s closest competitors.”

Additionally, the Commission said customers “have a certain level of countervailing buyer power.” This allows them to react in case of price increases of WLAN equipment and Ethernet campus switches.

'No Significant Advantage' in Servers or HPC Systems

The Commission did have concerns regarding the crossover between Juniper’s switches and HPE’s activities for the supply of high-performance computing (HPC) systems and mid-range servers. However, it found that in Europe, the combined company “would not have the ability to engage in anticompetitive bundling or tying practices.”

It said: “The merged entity would not have a significant degree of market power either on the market for the supply of mid-range servers or on the market for the supply of HPC systems. Customers' purchasing cycles for each of the respective products are different and therefore not conducive to allow any anticompetitive tying or bundling strategy by the merged entity. The merged entity would not obtain a significant advantage by offering its data centre switches as a bundle with either HPE’s servers or HPE’s HPC systems.”

Related:UK Regulator Investigating HPE’s Acquisition of Juniper

The Commission also noted that “competitors could replicate and challenge any tied or bundled products.”

The Commission therefore concluded that HPE’s acquisition of Juniper would not raise competition concerns and therefore cleared the transaction unconditionally.

UK Regulator Still to Decide On HPE’s Acquisition of Juniper

Meanwhile, the U.K. Competition and Markets Authority (CMA) is still considering whether the acquisition will stifle competition in the U.K. The CMA said it will announce on Aug. 14 if it will continue with a second phase of the investigation.

There has been no word on any plans by the U.S. Federal Trade Commission (FTC) to weigh in in the deal.