Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Hewlett Packard Enterprise’s acquisition of rival Juniper Networks challenged by U.S., (Jan 30, 2025)

By Jeffrey May, J.D.

First civil antitrust complaint filed by new Trump Administration targets deal combining two of three largest providers of enterprise-grade WLAN solutions.

The Department of Justice Antitrust Division filed a lawsuit on January 30 to block the combination of the second- and third-largest providers of commercial or “enterprise” wireless networking solutions in the United States. The Antitrust Division asked a California federal district court to block the acquisition by Hewlett Packard Enterprise (HPE) of smaller rival Juniper Networks, Inc. The government alleged that the acquisition, if permitted to proceed, would result in two firms—market leader Cisco Systems, Inc. and HPE—controlling over 70 percent of the relevant market, which is defined as the U.S. market for enterprise-grade wireless local area network (WLAN) solutions (U.S. v. Hewlett Packard Enterprise Company, Case No. 3:25-cv-00951 (N.D. Cal. Jan. 30, 2025)).

This marks the first civil antitrust action of the second Trump Administration. While the deal, which was announced in January 2024, was reviewed under the Biden Administration’s antitrust leadership, Omeed A. Assefi, the Acting Assistant Attorney General in charge of the Antitrust Division, signed off on the complaint.

Merging parties’ plan to defend the deal. HPE and Juniper have pledged to fight the Justice Department challenge. The companies called the government’s analysis of the acquisition “fundamentally flawed.” They add that the WLAN product area is “characterized by robust competition” and that the “transaction will benefit customers who gain a comprehensive AI-driven and cloud-native IT portfolio including the networking architecture necessary to manage and simplify their expanding and increasingly complex connectivity needs.” With respect to the product market, the merging parties called the government’s claim that the WLAN market is composed of three primary players “substantially disconnected from market realities.”

According to the parties to the proposed merger, antitrust regulators in 14 jurisdictions have approved the deal, with Israel and the United States being the only hold-outs. In August 2024, both the European Commission and U.K. Competition and Markets Authority cleared the transaction.

WLAN technology. The merging companies are providers of commercial wireless networking technology. According to the government, “public and private companies, state and local agencies, and non-profit organizations, spend billions of dollars buying wireless networking solutions for their offices, stores, factories, and warehouses.” Enterprise WLAN solutions include: enterprise-grade wireless networking solutions generally include wireless access points; the separate hardware or advanced software systems to monitor and manage them; and related logistical support, including security updates and patches.

In its complaint, the government alleged that Cisco and HPE are the two leading providers of enterprise-grade WLAN solutions to U.S. companies. Juniper, the third-largest provider in the United States, “competes aggressively against Cisco and HPE in several distinct customer segments and industries,” in the government’s view. The government took the position that HPE set out to acquire Juniper, because the company was a competitive threat. Juniper was launched into the upper tier of wireless system providers, according to the government, when it acquired Mist Systems, which “differentiated itself by building tools optimized for remote cloud management and using artificial intelligence and machine learning tools (“AIOps”) to streamline network operations and improve the experience for network operators and users.”

The transaction is alleged to be presumptively illegal based on market concentration. Moreover, the merger would allegedly reduce head-to-head competition between the merging parties and would the increase the risk of coordination among the remaining vendors.

Companies: Hewlett Packard Enterprise Co.; Juniper Networks, Inc.; Cisco Systems, Inc.

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