Hewlett Packard’s (HP) ambitious $14 billion (A$22.5 billion) deal to acquire networking giant Juniper has hit a major roadblock, as the U.S. Department of Justice (DOJ) moved to block the merger on the grounds of anti-competitive risks. The DOJ’s concerns center on the potential creation of a duopoly in the U.S. enterprise-grade wireless networking market, with HP and Juniper—currently the second and third-largest players—securing over 70% of market share if the acquisition were to go ahead.
According to the DOJ, the deal would reduce competition, stifling innovation and potentially leading to higher prices for consumers in a market that is already heavily concentrated. “Rather than continue to compete as rivals in the WLAN marketplace, they seek to consolidate—further increasing concentration in an already concentrated market,” said Omeed A. Assefi, acting Assistant Attorney General of the DOJ’s antitrust division.
HP and Juniper have expressed strong opposition to the decision, with the companies describing the DOJ’s interpretation of antitrust laws as “fundamentally flawed.” In a joint statement, they vowed to fight the decision, stating: “We will vigorously defend against the Department of Justice’s overreaching interpretation of antitrust laws.”
The acquisition has already received the green light from regulators in 14 other jurisdictions, including the European Union and the United Kingdom, leaving the U.S. as the only major market to take action against the deal.
This regulatory setback comes months after HP announced the acquisition in January 2024. The DOJ claims that HP sought to acquire Juniper after facing increased pricing pressures from the company, which had been a major competitor, forcing HP to discount its products.
HP’s stock price responded negatively to the news, dipping over 2% before closing at $32.80, just above its previous close of $32.61. Despite the setback, HP remains determined to challenge the DOJ’s decision, as the company has a market capitalization of $30.8 billion and considers the deal crucial for expanding its networking capabilities.
As the legal battle unfolds, the future of HP’s acquisition of Juniper hangs in the balance, with potential implications for the U.S. networking market and the broader tech industry.
Source: U.S. Department of Justice, HP & Juniper press statements, Azzet.com
Bureaux de Hewlett Packard Enterprise at Meyrin by Guilhem Vellut on Flickr CC BY 2.0
