The UK is investigating HPE’s planned $14 billion acquisition of Juniper Networks

The UK Competition and Markets Authority (CMA) has launched a formal ‘Phase 1’ investigation into the proposed acquisition of Juniper Networks by Hewlett Packard Enterprise (HPE).

The CMA says it is in the early stages of assessing whether the deal is likely to “result in a significant reduction in competition for goods or services in any market or markets in the UK”.

HPE announced plans to acquire Juniper Networks in January 2024 in a transaction aimed at unifying their strengths in the areas of networking and IT infrastructure, including servers, storage, consulting, routing, switching and security. As with almost every big deal today, the primary motivation for the merger was to, in corporate parlance, “accelerate AI-driven innovation,” given the key role that cloud infrastructure plays in the burgeoning AI movement.

HPE said at the time that it would pay $40 per share, a 32% premium over the last closing price, for a total value of $14 billion.

A deal of this size has always attracted regulatory scrutiny, and the UK is the first jurisdiction to show its hand, although it is likely that the European Commission will at least look into the deal, while the Federal Trade Commission (FTC) in the United States could also potentially raise concerns. Meanwhile, Brazilian regulators gave unconditional approval to the deal in May.

Regulatory roadblocks have the potential to derail deal work. Last year, Adobe was forced to withdraw its $20 billion bid for Figma after objections from the EU and UK

For now, the CMA is inviting comments from relevant stakeholders, with a deadline of July 3. The CMA will then have until August 14 to decide whether to proceed to a formal “phase 2” investigation.

We have reached out to HPE for comment and will update this post as we learn more.