The Justice Department has filed a lawsuit to block Hewlett Packard Enterprise’s (HPE) $14 billion acquisition of Juniper Networks, marking the first such action under the new Trump administration. The Department’s complaint argues that the merger would significantly reduce competition in the market, potentially raising prices and stifling innovation. The government claims that the deal would leave the U.S. enterprise market dominated by just two companies, HPE and Juniper, controlling over 70% of the wireless local area network (WLAN) market, which is currently already concentrated. HPE had announced its plan to acquire Juniper at $40 per share, a move intended to enhance its networking business.
The merger proposal has sparked controversy, particularly as many had expected the Trump administration to be more lenient with antitrust enforcement. However, the Justice Department’s intervention in this case indicates a commitment to maintaining competition, regardless of the new administration’s approach. HPE and Juniper have expressed their strong opposition to the lawsuit, with both companies arguing that the merger would foster increased competition and deliver greater innovation to customers in the networking market. They contend that the combined entity would present new opportunities for businesses, countering the Department’s claims of harm to market dynamics.
Hewlett Packard Enterprise, facing growing competition from Juniper, is portrayed by the Justice Department as a company struggling to compete.
The Department’s complaint highlights concerns raised by HPE’s sales team about Juniper’s growing influence, suggesting that HPE had to resort to purchasing the rival company to stay competitive. Additionally, the lawsuit references an internal statement from an HPE executive encouraging sales staff to “kill” Juniper in sales competition, further emphasizing the threat Juniper posed to HPE’s market position.
The case is a significant development in the broader context of U.S. antitrust enforcement, particularly as the Biden administration had previously been accused of overreaching with other high-profile cases. For example, regulators had blocked the merger between Kroger and Albertsons, as well as forced American Airlines and JetBlue to abandon their northeast U.S. partnership. With this latest challenge to the HPE-Juniper merger, it remains to be seen whether the Trump administration will continue to intervene in similar deals or adopt a more hands-off approach moving forward.
