Annand said he’s no competition law expert, but noted that the CMA had only announced a so-called “Phase One” inquiry, to see if a more thorough Phase Two investigation is warranted.
“The CMA has not released a hypothesis as to why this merger might interfere with fair trading, nor, as I understand it, are they required to. We will not know the likelihood of a delay or scuttling of the merger until we see the submissions from interested parties,” he said. Considering the likely effect on the market, he added, “Juniper is 10% the size of Cisco and one-quarter the size of HPE. They have complementary and not competing products, and the size of the newly combined company is not out of step with other Tier One IT Infrastructure companies.”
When the deal was announced in January, HPE, which has a market cap of about $21 billion, said the acquisition is expected to double its networking business by adding a significant, though somewhat overlapping, campus and data-center product lineup. Juniper’s enterprise networking business was the largest of its three core divisions — cloud, service provider and enterprise — in the first quarter of 2022 for the first time in Juniper’s history, and it has continued to grow since then. Juniper’s market cap is about $12 billion.
Mauricio Sanchez, senior director of enterprise security and networking research at Dell’Oro Group, had prevously described the acquisition as a “tectonic shift” for the networking industry and extends HPE’s reach into distributed denial of service (DDoS) attack protection offerings, firewalls, cloud workload security, and distributed cloud networking markets: “HPE has been in the networking industry even longer, going back to the 1980s, and most recently, a well-regarded enterprise networking player with Aruba campus solutions. However, both firms have a wider portfolio that spans the network security and SASE/SD-WAN technology landscape.”
He said key strengths of the deal are the fact that Juniper brings a number of network security technologies that HPE lacks, and that its reputation in the cloud and comms service provider space will help HPE’s overall credibility.
