The Justice Department initiated legal proceedings to thwart Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks, claiming the merger would substantially diminish competition, escalate prices, and impede innovation.
The big picture: The Justice Department’s decision to intervene in the merger between Hewlett Packard Enterprise and Juniper Networks was unexpected, occurring just 10 days after Donald Trump’s inauguration, contradicting expectations of decreased antitrust pressure under the Trump administration.
- Hewlett Packard Enterprise’s purchase of Juniper Networks for $40 per share aimed to enhance HPE’s networking business but was met with skepticism by the government, which portrayed HPE as striving to counter Juniper’s rising influence in the market.
- Concerns about market concentration arose, as Hewlett Packard Enterprise and Juniper together wield significant influence as the U.S.’s second- and third-largest providers of WLAN products and services. This potential consolidation could result in over 70% market domination, posing risks to competition.
Driving the news: Under President Biden, regulatory agencies had taken a strong stance against perceived antitrust violations, as evidenced by the FTC’s lawsuit blocking a massive merger between Kroger and Albertsons, as well as the Justice Department’s role in dismantling the American and JetBlue airlines partnership to preserve competition.
- Ongoing antitrust actions included U.S. regulators proposing the breakup of Google for maintaining a market-dominant position and legal challenges facing Nippon Steel’s attempted acquisition of U.S. Steel, with disagreements between the previous and current administrations regarding the deal.
