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The United States Justice Department has officially filed a lawsuit aimed at blocking Hewlett Packard Enterprise’s (HPE) proposed $14 billion acquisition of Juniper Networks. This move is reportedly in response to antitrust concerns, as the combined entity would consolidate the market for enterprise wireless equipment from three major vendors – HPE, Cisco, and Juniper – down to just two.
The news comes after HPE announced its intention to acquire Juniper Networks back in January 2024, with the promise of delivering more “competitive” and “comprehensive” AI solutions. The companies had initially received clearance from the European Commission in August, but it appears that the US Department of Justice has raised significant concerns about the impact on competition.
The lawsuit was filed in California federal court yesterday, with the Justice Department citing its findings as evidence that the acquisition would significantly reduce the number of major players in the market. The department believes this move would ultimately harm consumers and stifle innovation, as HPE would effectively have a stranglehold on the market.
HPE had initially pitched the deal as a strategic move to enhance its offerings in AI and automation, but it seems that these claims have not convinced the US government. It’s worth noting that Cisco Systems has also expressed concerns over the potential impact of this acquisition, although no formal complaint has been lodged at this time.
The Department of Justice’s lawsuit marks a significant turning point in the deal’s approval process, as it effectively puts the brakes on any potential merger. Juniper Networks and HPE will now have to respond to the government’s claims or risk seeing their deal blocked.
Source: techcrunch.com
