KEY TAKEAWAYS
- Hewlett Packard Enterprise said it will buy Juniper Networks in a $14 billion deal.
- The move is expected to boost Hewlett Packard Enterprise’s artificial intelligence portfolio.
- The agreement is expected to raise non-GAAP earnings per share and free cash flow within the first year, with projected annual cost savings of up to $450 million within three years.
Hewlett Packard Enterprise (HPE) said it will buy Juniper Networks (JNPR) in a $14 billion deal to boost the company’s artificial intelligence (AI) offerings.
The all-cash deal at $40 per share represents a premium of about 32% to Juniper Networks’ closing price Monday, before shares surged Tuesday on early reports of its imminent purchase.
The acquisition is expected to double HPE’s networking business, and could help enhance its artificial intelligence capabilities.
“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,” said HPE President and CEO Antonio Neri in a release.
The deal is projected to boost non-GAAP earnings per share and free cash flow within the first year of closing, and lead to annual cost savings of up to $450 million within three years. Pending regulatory approvals, the deal is expected to close in late 2024 or early 2025.
Hewlett Packard Enterprise shares were up 0.3% at $16.20 per share as of about 9:45 a.m. ET Wednesday following the news, while shares of Juniper Networks climbed 1.9% to $37.46 per share.