HPE Aruba says combining its portfolio with Juniper's will advance the shift towards higher-growth solutions and strengthen its high-margin networking business. The result will accelerate HPE's sustainable profitable growth strategy, and the transaction is expected to be accretive to non-GAAP EPS and free cash flow in the first year post-close.

In practical terms, the acquisition will double the size of HPE Aruba's networking business and create a new networking leader with a comprehensive portfolio that presents customers and partners with a compelling new choice to drive business value.

In addition, the explosion of AI and hybrid cloud-driven business is accelerating demand for secure, unified technology solutions that connect, protect, and analyse companies' data from edge to cloud. HPE believes these trends, and AI specifically, will continue to be the most disruptive workloads for companies and thus has been aligning its portfolio to capitalise on these substantial IT trends that have networking as a critical connective component.

The combination of HPE Aruba and Juniper portfolios will boost HPE's edge-to-cloud strategy and enable it to lead in an AI-native environment, based on a foundational cloud-native architecture. The acquisition will provide customers of all sizes with a complete, secure portfolio that enables the networking architecture necessary to manage and simplify the expanding and increasingly complex connectivity needs.

Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting directly to HPE President and CEO Antonio Neri.

“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” said Neri. “This transaction will strengthen HPE’s position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders. I am excited to welcome Juniper’s talented employees to our team as we bring together two companies with complementary portfolios and proven track records of driving innovation within the industry.”

“Our multi-year focus on innovative, secure AI-native solutions has driven Juniper Networks’ outstanding performance,” said Rahim. “We have successfully delivered exceptional user experiences and simplified operations, and by joining HPE, I believe we can accelerate the next phase of our journey. In addition, this combination maximises value for our shareholders through a meaningful all-cash premium. We look forward to working with the talented HPE team to drive innovation for enterprise, service provider and cloud customers across all domains, including campus, branch, data centre and the wide area network.”

The transaction has been unanimously approved by the boards of both companies. The transaction is expected to be funded based on financing commitments for $US 14 billion in term loans. It is expected to close in late calendar year 2024 or early calendar year 2025, subject to regulatory approvals, approval of the transaction by Juniper shareholders, and satisfaction of other customary closing conditions. The combination is expected to achieve operating efficiencies and run-rate annual cost synergies of $US 450 million within 36 months post-close.

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