The U.K.’s antitrust watchdog has opened a probe to evaluate whether Hewlett Packard Enterprise Co.’s acquisition of Juniper Networks Inc. complies with local competition laws.

The Competition and Markets Authority, or CMA, announced the investigation today. Officials will publish the results of the probe by August 13.

In January, HPE announced an all-cash deal to acquire Juniper for $14 billion. It estimates that the acquisition will double its networking business. It also forecasts that Juniper will start positively contributing to its adjusted earnings per share within a year of the deal’s completion, which is expected to take place in early 2025 at the latest.

The company said in a statement responding to the CMA’s probe that “we are working to complete all necessary reviews and secure clearance quickly and efficiently so that we can begin delivering value to our customers as soon as possible. We continue to expect to close by the end of calendar year 2024 or early 2025.”

HPE’s existing networking portfolio is based in significant part on technology it obtained through another acquisition, the 2015 purchase of Aruba Networks for $2.7 billion. The company sells data center switches, access points for providing wireless connectivity at offices and related products. A cloud-based management platform, Aruba Central, allows administrators to orchestrate HPE network equipment through a centralized interface.

HPE obtained another set of networking products through its purchase of supercomputer maker Cray in 2019. Slingshot, as the product family is known, is specifically optimized to link together the servers and other hardware components that make up a supercomputer. HPE says the latest iteration of Slingshot can process more than 1.2 billion packets per second per port.

Some of the devices in the product portfolio are based on an ASIC, or application-specific integrated circuit, specifically optimized for networking tasks. HPE has also equipped Slingshot with several software features for optimizing the flow of traffic. The software can find the fastest data travel path between a supercomputer’s servers, as well as prevent demanding applications from using up other workloads’ bandwidth.

Juniper likewise ships custom ASICs with its products. The company’s Trio chip series is designed for network devices that must process multiple types of traffic, such a mix of requests from consumer devices and enterprise applications. Juniper has also developed a second ASIC line, the Express series, for appliances that prioritize maximizing network speeds over supporting a wide range of traffic types.

The company competes in many of the same markets as HPE. It sells data center switches, routers, wireless access points for offices and optical network equipment. Juniper also provides software for managing those devices, including an artificial intelligence assistant called Marvis that can speed up tasks such as troubleshooting firmware errors.

The CMA will accept public comment on its inquiry into the acquisition until June 19. Depending on the probe’s findings, officials may decide to greenlight the deal or refer it to a more in-depth Phase 2 investigation. Such investigations can potentially lead to the CMA blocking an acquisition or making its completion contingent on changes to the original deal terms. 

Photo: HPE