The UK competition watchdog said on Wednesday (19 June) it was investigating whether Hewlett Packard Enterprise’s (HPE) planned $14bn acquisition of Juniper Networks would result in competition concerns in the country.
HPE said in January that it would buy networking gear maker Juniper to bolster its AI offerings.
The planned acquisition came amid a rapidly developing AI market fuelled by the release of ChatGPT in November 2022, with companies across the industry increasing expenditure to implement their own AI capabilities.
HPE said the acquisition would likely double its networking business, as the company plans to use Juniper’s AI-enabled enterprise networking operations and security.
The significant size of the deal was likely to attract regulatory scrutiny. Although the UK is the first to announce a probe, it is expected that the European Commission will follow suit shortly after, as well as the US Federal Trade Commission.
Regulatory scrutiny has halted major deals in the past. In 2023, Adobe was forced to back out of its massive $20bn bid for Figma following hurdles placed by UK and EU watchdogs.
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By GlobalDataEmir Halilovic, research director for telecom technology & software at research company GlobalData said: “The proposed acquisition will significantly boost HPE’s presence in telecom network equipment provider ecosystem.
“On the other hand, it completes successful transformation of Juniper into technology provider to cloud service providers, telcos, and enterprises – with telco likely playing a secondary role for HPE networking business going forward.”