The US Department of Justice filed a lawsuit on Thursday to prevent Hewlett -Packard Enterprise from the acquisition of $ 14 billion in Juniper Network, and claimed that a huge hit contract reduced competition and weakened innovation. Here are five things you need to know.
The US Department of Justice filed a lawsuit on Thursday to prevent the acquisition of $ 14 billion of the Hewlett Packard Enterprise of Juniper Networks, and claimed that the big hit agreement would “reduce competition and weaken innovation.” This movement was brought to the impact of the networking market and solution providers. Many of them thought they had almost completed their partnerships.
HPE and Juniper Networks responded immediately on Thursday, returned to the Judicial Ministry and called the “fundamental defects.”
Solution providers told the CRN that crushed transactions would benefit the market heavyweight Cisco system. If the lawsuit was successful, the competition in the networking market would “weaken”, said the solution provider.
HPE-JUNIPER’s transactions are in a balance, so the pending litigation and the five things to know are what the networking market means.
DOJ’s claim claims that “raising prices, reducing innovation, and reducing choices.”
The Ministry of Justice’s complaints submitted to the northern part of California said, “eliminating intense competition between companies, raising prices, reducing innovation, reducing score selection of American business and institutions. I am violating the Clayton Section 7.
The 1914 Clayton anti -trade method prohibits anti -competitive merger and looting prices.
“HPE and Juniper are successful companies, but they try to integrate them as rivals in the WLAN market. We are concentrating on the market we are already concentrating,” he said. Assistant Asceph, the ban on the ban, stated in a reporter’s release. “The threat caused by this merger is not theoretical. The important industries of our country, including American hospitals and small and medium -sized enterprises, are based on the wireless network to complete the mission. Competition will decrease significantly, innovation will be reduced, and large -scale egs in the US economy will pay less from wireless technology providers.
DOJ states that if the proposed transactions between HPE and Juniper are allowed, they will further integrate the market that is already concentrated and leads only two companies that lead more than 70 % of the WLAN market. It depends on US companies. -Juniper and Market leader Cisco.
Furthermore, the complaint claims that HPE is “comparing wireless access points and network software license prices with Juniper and recommends a deeper discount than the price to maintain competitiveness.”
For example, this complaint recommended that the HPE lower the price of the software package in the internal price of the internal price in July 2022, a highly wireless access point albustral license. It was identified as HPE’s “major competitors”.
HPE and Juniper Network vow to meet DOJ in court
HPE and Juniper Network attacked the U.S. Department of Justice and pledged to fight in the court to “fundamentally defect” the merger between the two companies.
“HPE and Juniper are completely committed to transactions, and we believe that we can win the lawsuit, close the transactions, and provide customers with the benefits of this acquisition,” HPE and Juniper responded to DOJ’s complaints. I mentioned.
“The Ministry of Justice’s analysis on the acquisition has a fundamental defect, and is disappointed with the decision to prohibit the termination of transactions,” said the two companies. The interpretation of the anti -trading method overreach, this transaction demonstrated how to provide a greater innovation and choice for customers, strengthened competition, and strengthened US networking infrastructure backbones, so that dynamics in the networking market Actively change. “
HPE and Juniper argued that transactions are competitive, and there are “extensive evidence” that indicates that the product area (Wireless Local Area Network (WLAN)), which is the focus of DOJ suits, is active. An alternative between HPE and Juniper.
“The DOJ claim that the WLAN market is composed of three major players is substantially disconnected from the reality of the market,” said HPE and Juniper. “Customers have shifted to AI and cloud -led business strategies, and for safe and unified technology solutions to protect data, the barriers of entry have decreased, and the WLAN has grown and competition has intensified. WLAN is a very competitive market, a wide range of players is a competitive market, all of which are fighting for business and bidding in the competitive RFP process. , Other WLAN vendors do not hinder the ability to actively compete. “
HPE said, “The claims ignore the US sufficiently capitalized competitors, and some have a market share comparable to junipers and maintain more than 50 % market share.” I insisted.
Battle for fog
The Juniper network, based in Sunny veil, California, has been transformed mainly on software since the acquisition of the MIST system in 2019, and has spent more artificial intelligence in more places in the network. Cisco MERAKI and HPE ARUBA’s unique edge service platform (ESP). JUNIPER’S MIST AI Technology is one of the largest HPE caps if the transaction progresses. HPE states that the combined company will lead to the industry-leading AI-Native networking business.
DOJ’s complaint has forced the pressure from Juniper to be forced to “discount and invest in advanced software products and functions as part of the multi -facet campaign for” fogging “. I am doing it.
Complaints have continued, saying that the “beat mist” campaign has failed, and that it should be blocked by HPE’s desire to win Juniper for $ 14 billion instead.
Cisco’s Stakes
Megadeal between HPE and Juniper is expected to double the HPE networking business. According to Channel Partners, which reported that the CRN last year that HPE-JUNIPER Networks would guide you to Thailand, Cisco is likely to be operating in Cisco, which is expected to be an alternative to Cisco. UP takes a “direct purpose” to the networking giant.
Partner told CRN that the litigation news is likely to be welcomed by Cisco. A high -tech company based in San Jose, California, has refused to comment on the DOJ litigation news to block transactions when the CRN reached.
However, even if the juniper network is added, the Cisco networking business is almost three times the combination of HPE Janipiper.
In FY2024, Cisco’s networking segment, including core switching and routing business, recorded $ 29.23 billion, down 15 % compared to FY2023. The company’s year in FY2024 fell from $ 5.38 billion from the previous year. Juniper Network, on the other hand, reached $ 55.6 billion in fiscal sales in FY2023, $ 500 billion to $ 500 billion in 2022 in FY2022.
Partner’s reaction
HPE and Cisco’s partner reported to the CRN that the current administration was more friendly to M & A for the Starter in the news of the DOJ litigation.
“The financial analysts I recently talked about anticipated that the next management would be very advantageous for M & A,” he told CRN for one executive of both Cisco and HPE and partner solution providers. Ta. “My first idea was to be a hold over from the DOJ leadership, so I was shocked by the recently appointed Secretary of Justice by the new administration.”
In contrast to the opinions of the Justice Ministry, this transaction is “reducing competition and weakening innovation”, so HPE-JUNIPER’s partnership actually supports competition and innovation and fire Cisco’s feet. He stated that it would help you get a little closer. In particular, given the recent focus of the security market with the acquisition of $ 28 billion in Splunk, it is attracting attention in innovation in the core networking business.
The transaction, when shutting down, boosting the base of the Cisco networking market, the partner told the CRN on Thursday.
“This lawsuit is completely confusing for me. How many acquisitions have you acquired in the past 20 years to continue the control of the market? I was shocked. Cisco HPE and JUNIPER’s partner told CRN that the dominant player in the market for 30 years has weakened the competition with Cisco.
