When HPE announced This came as a bit of a shock after the company had planned to acquire Juniper Networks for $14 billion in cash earlier this month. Indeed, HP had already acquired Aruba in 2015 for about $3 billion. Acquiring another network company would likely just add another layer to its business. Of course, complications always arise when integrating one large organization into another. HP hasn't had the best record of being a smooth operator in this regard over the years.
But surprisingly, neither company positioned this conscious combination as pure network play. In fact, Juniper CEO Rami Rahim hinted that this was about his AI in a blog post announcing the partnership. “This combination with HPE is expected to enable us to deliver a more comprehensive, more competitive, and truly end-to-end experience-first AI-native solution,” he wrote.
Regardless of how you position it, the deal, which pays $40 per share, or a 32% premium to the January 8th closing price (according to CNBC), is the kind of offer that will be hard for Juniper to refuse. was. Assuming regulators don't object (which isn't a given these days), the deal could close late this year or early next year. They allow considerable leeway for regulatory oversight.
HPE investors have been lukewarm about the deal since it was announced on January 12th. That is, whether the stock price is indicative of their sentiment. Consider that on January 8, when the Journal broke the news that a deal between the two companies was imminent, the stock price was $17.72 per share. By January 12, when the deal was officially announced, the price had fallen to $15.89 and has remained there ever since, closing at $15.92 on Thursday, a drop of almost 8% over the month. That's not necessarily enthusiastic support.
With a few weeks to digest this deal, we decided to take a look at what it's all about and whether investors should be a little more positive about it. As you can see, both companies think the numbers are pretty good, and they actually match up pretty well (unless HPE messes it up).
Is it really about AI?
It's hard to find anything in the tech industry these days that isn't focused on AI, so it's no surprise that both companies are putting AI at the heart of this deal. But is it really accurate?