Hewlett-Packard Subsidiary Acquired by Juniper for 18 Trillion Won... 'AI Enhancement'

Acquisition Premium Exceeds 30%
M&A Process Expected to Complete by Year-End at the Earliest

Hewlett Packard Enterprise (HPE), a subsidiary of the American PC and printer manufacturer Hewlett-Packard (HP), is acquiring Juniper Networks (hereafter Juniper) for $14 billion (approximately 18.5 trillion KRW) to strengthen its artificial intelligence (AI) business.

[Image source=Reuters Yonhap News]

On the 9th (local time), The Wall Street Journal (WSJ) reported that HPE agreed to pay Juniper $40 per share in cash. The acquisition price represents a 32.4% premium over Juniper’s closing price the previous day.

To finance the acquisition, HPE plans to borrow from Citigroup, JP Morgan, and Mizuho, then repay the loans through refinancing, preferred stock issuance, and retained cash. Considering regulatory approvals, the deal is expected to close by the end of this year or early next year.

HPE, which spun off from Hewlett-Packard in 2015, provides cloud services to a diverse range of customers including small and medium-sized businesses, large enterprises, and government agencies. Juniper, the company being acquired, is a telecommunications network service and equipment manufacturer that operates an AI-related business called "Mist AI," which is expected to bolster HPE’s AI capabilities. Mist AI is a service that optimizes users’ wireless connections through AI and machine learning.

With this acquisition, HPE aims to double its existing networking business. Juniper CEO Rami Rahim will lead the integrated networking division.

Following several major mergers and acquisitions (M&A) deals since the beginning of the year, the market anticipates that M&A activity, which had frozen last year due to high interest rates, may become active again.

Meanwhile, following the news of the acquisition talks, HPE’s stock price fell about 9% that day, while Juniper Networks’ shares surged more than 21%.

This content was produced with the assistance of AI translation services.