HPE will acquire Juniper, its networking gear vendor, for around $14bn (£11bn), or $40 (£31) per share in an all-cash deal. 

Following the Wall Street Journal’s report that the companies were in “advanced talks,” HPE’s share price jumped 22%. Their purchase price of $40 therefore represents a 32% premium over Monday’s close before the Journal story was published. 

HPE expects to close the deal late this year or even early 2025, pending regulatory approval and approval of the transaction by Juniper shareholders. According to HPE, the acquisition will double its existing networking business after years of competition, as well as lead to $450 million (£353.5m) in annual cost savings within three years of the deal’s completion, HPE said.

The move is expected to expand HPE’s enterprise networking exposure, particularly in AI, beyond wireless local-area networks (WLAN). To keep up with the demand for faster communications between servers by the latest AI systems, the acquisition represents an effort by HPE to improve its offerings. 

“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market,” said Antonio Neri, President and CEO of HPE.

“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.”

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According to a statement, if the acquisition goes through, Juniper CEO Rami Rahim would lead the combined team and report to HPE’s CEO, Antonio Neri.

Juniper, founded in 1996 and going public in 1999. It was a rival to Cisco for years and was a survivor of the original dotcom boom. In 2022, the company’s revenue grew 12% year over year, and in its most recent quarter reached $76m (£59.7m) in profit on $1.4bn (£1.1bn) in revenue.

HPE came on to the scene in 2015 after HP split in two, resulting in HPE selling servers and other equipment, and HP Inc., which makes PCs and printers.

This deal is but one of the latest transactions in the IT management and AI space. In September, Cisco acquired software company Splunk for $28bn (£22bn), and November saw Broadcom close a $69bn (£54.2bn) acquisition of VMware.

This is all despite a recent slowdown in mergers and acquisitions last year, due to heightened market volatility, high interest rates, and increased regulatory scrutiny.