HPE forced to offload Instant On networking division and license Juniper’s AI Ops source code in DOJ settlement
The US Justice Department (DOJ) has settled a lawsuit contesting HPE’s $14 billion acquisition of Juniper Networks.
As part of the settlement, HPE will be required to make concessions to push the deal through. This includes divesting its ‘Instant On’ wireless networking division within 180 days, court filings show.
That means the company will be required to offload all assets, IP, and customers related with this particular area of the business.
Elsewhere, HPE is also required to hold an auction to license source code for Juniper’s AI Ops for Mist platform.
“The license will be perpetual, non-exclusive, and include optional transitional support and personnel transfers to facilitate competition,” the DOJ said in a statement on Friday.
While the settlement requires approval by a judge, this does pave the way for the acquisition, according to HPE chief executive Antonio Neri.
In a statement issued last week, Neri welcomed the move and said the settlement “preserves the intended benefits of this deal” and will create “greater competition in the global networking market”.
“For the first time, customers will now have a modern network architecture alternative that can best support the demands of AI workloads,” he said.
“The combination of HPE Aruba Networking and Juniper Networks will provide customers with a comprehensive portfolio of secure, AI-native networking solutions, and accelerate HPE’s ability to grow in the AI data center, service provider and cloud segments.”
HPE has had to battle for the Juniper deal
HPE first announced plans to acquire Juniper Networks in 2024, but the deal quickly sparked competition concerns. The company noted that the acquisition would create a new contender in the global networking market and enable it to double the scale of its networking business.
However, the DOJ announced legal action in January in a bid to block the deal, arguing that it would stifle competition in the space. If approved, the acquisition would mean Cisco and HPE would control more than 70% of the US networking market combined.
The DOJ specifically highlighted competition in the WLAN supply market as a key concern, suggesting that cutting competition in the space would harm innovation and impact customers.
HPE and Juniper were the second and third largest suppliers of WLAN equipment in the US, ranked behind Cisco.
A back and forth between the DOJ and HPE quickly unfolded in the wake of the legal action, with the latter suggesting the department was “divorced from reality” and that any block would benefit competitors.
The DOJ’s attempt to contest the deal also came after European and UK regulators approved the deal in August of last year.
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