Representatives from Hewlett Packard Enterprise and Juniper Networks met with Justice Department antitrust enforcers this week passed in a last-ditch effort to persuade the agency not to challenge its proposed $14 billion settlement, according to people familiar with the matter.
The high-level meeting between companies and the Justice Department’s top antitrust officials typically takes place before the government decides whether to sue.. It is often called an “extreme unction” meeting.
Justice Department officials are willing to challenge the deal if necessary and have made their concerns known to the company, but no final decision has been made on whether to file a lawsuit. The department could allow HPE to proceed with its purchase of Juniper, possibly with some changes to address its competition concerns if the companies agree to review the transaction.
According to the sources, who requested anonymity to discuss non-public information, a decision could be made this week on whether to challenge the deal. However, the companies could choose to delay the deal until President-elect Donald Trump’s administration takes office in January in hopes of getting a more favorable view on the transaction, the sources said.
Concerns about the deal failing have weighed on Juniper shares in recent days. Shares fell US$2.5% to US$35.61 in New York on Monday, following a 5% drop on Friday. That’s well below HPE’s offer price of $40 per share in cash for Juniper. The Justice Department declined to comment for this article.
HPE and Juniper said they have been working cooperatively with government regulators throughout the process, but declined to comment on the meeting.
Penny Still, Juniper’s senior director of global relationships, said in a statement that the deal is “highly pro-competitive and would allow the combined company to better serve customers with improved product offerings and greater innovation.”
HPE spokeswoman Laura Keller said the deal “will fundamentally change the dynamics of the networking sector for the better by promoting more competition and innovation.”
HPE and Juniper have said they hope to close the deal in early 2025, which could allow them to wait for Biden’s antitrust authorities to act.
Biden’s antitrust leaders have been aggressively challenging the agreements, pursuing their goal of curbing corporate concentration across the economy.But given Trump’s victory earlier this month, companies may want to wait for a new administration that is potentially more receptive to deals.
Juniper, like its biggest rival, Cisco Systems Inc., makes networking devices such as routers and switches. The network is the technology that directs the flow of information between devices and across the Internet.
Since Hewlett-Packard split into two companies in 2015, HPE has focused on expanding lucrative lines of business, such as selling high-powered computing and cloud services.
Both companies supply equipment that is used by businesses and organizations to provide wireless Internet access to people within their facilities. Cisco is the leader with approximately 31% of the US market, according to IDC. HPE and Juniper are the third and fourth largest companies in the United States, respectively, and together they would rise to second place ahead of Vantiva SA.
Both the United Kingdom and the EU have already given their approval to the agreement. The Justice Department launched an extensive investigation into the operation earlier this year.. Department attorneys have been interviewing company executives, as well as employees of its clients and competitors, the people familiar with the matter said.
