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HPE
offered $40 per share to Juniper shareholders, the companies
said on Tuesday. That represents a 32.4% premium to the stock's
close on Monday, when the news of the deal first emerged.
The acquisition comes at a time when the AI gold rush has led
companies to pour billions of dollars into upgrading and
developing new wares and is expected to double HPE's networking
business.
HPE, grappling with sluggish demand in its traditional server
business, is looking to tap into Juniper's offerings such as
network security and AI-enabled enterprise networking operations
(AIOps).
Weak demand from inflation-hit wireless carriers and cable
operators, as well as stiff competition from Cisco Systems and
Nvidia in the networking space has been a drag on Juniper.
Shares of Juniper were up 0.5% in extended trading after the
bell, while those of HPE were largely flat.
The deal is expected to be accretive to HPE's non-GAAP earnings
and free cash flow in the first year post completion, the
companies said.
The transaction is expected to be funded through financing
commitments for $14 billion in term loans and is likely to close
in late 2024 or early 2025, subject to regulatory approvals.
J.P. Morgan Securities LLC and Qatalyst Partners are serving as
HPE's financial advisors.
(Reporting by Zaheer Kachwala, Chavi Mehta, Harshita Mary
Varghese and Savyata Mishra in Bengaluru; Editing by Maju Samuel
and Rashmi Aich)
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