On January 11, HPE officially announced the acquisition of Juniper Networks for US$14 billion (about 100.4 billion yuan). Now that the two companies have reached a definitive agreement and the boards of directors of both companies have approved the transaction, it means that the acquisition is already a foregone conclusion, pending regulatory approval.
The deal, seen as a strategic move by HPE to strengthen its position in the emerging AI market, has seen Juniper shares soar nearly 22% at the open on Tuesday following Tuesday's news, compared to a less optimistic outlook for HPE, which has been trending since Tuesday.
You know, $14 billion is not a small amount, not only 213More than half of the market value of $500 million is close to Juniper's current market capitalization, which reflects that HPE is bound to win this acquisition and wants to make every effort to promote this acquisition, but is this acquisition really worth optimism?
For this acquisition, the industry is also expressing their opinions.
Some industry insiders believe that this is an important turning point in the network industry. HPE's move aims to significantly expand its "network business".As suchHPE claimstheThe goal is:willThe combined networkBusiness creation becomesA "new network leader".
In 2015, HP spun off its software, services, PC and printer businesses to form HPE, retaining the server, storage, networking, technical support, consulting and financing businesses for data center equipment.
Juniper Networks is a leading provider of key telecom networks (key core networks, edge and metro transport networks, network security, and AIOPS technology). Notably, its Mist AI business is able to use AI and machine learning to optimize the user experience for wireless access, and many telecom network operators see Juniper as an innovator.
In terms of network business, this transaction can increase HPE's market share in the network space and enter the "high-growth areas of 5G and cloud networks". The combined companies will provide cloud-based, high-performance, experience-first, secure, end-to-end AI-native solutions with the ability to collect and analyze aggregated telemetry data across domains.
Juniper's Mist AI platform is particularly strategic for HPE. This is due to both the shift in HPE's computing strategy, which is increasingly focused on supporting a wide range of AI applications; It is also in response to the needs of the current situation, the United States has increased investment in domestic chip manufacturing, and more emphasis has been placed on the importance of high-end chips in artificial intelligence technology.
In addition, industry analysts have shown that Juniper's RAN Intelligent Controller (RIC) platform could have a positive impact on HPE's telecom business unit. This complements HPE's recent acquisition of Athonet to enter the enterprise private cellular services market. It's worth mentioning that HPE's competitor Dell has expanded its telecom product line. The acquisition could also be a defensive strategy for HPE to strengthen its competitive position in the telecommunications sector.
In addition to its network advantages, Juniper brings a number of cybersecurity technologies that HPE lacks, and HPE will have the added strength of these new skills to challenge competitors such as Cisco, Extreme, Arista and Fortinet.
Another partInvestor pointswithAnalystThe acquisition was also questioned. This is mainly reflected in the current not optimistic, as well as in the future for a period of timeDebt burdenand each otherOverlapping product linesHow to integrate and optimize on.
HPE CEO Antonio Neri said in a statement that the acquisition "represents an important inflection point in the industry and will change the dynamics of the online market, providing customers and partners with a new option to meet their toughest needs." In response, HPE said the deal will be financed through term loans, which will be replaced over time by a "combination of new debt, mandatory convertible preferred** and cash".
In terms of HPE's market performance, the company has struggled to achieve growth of more than 2% in recent years. In November, its revenue forecast also fell short of analysts' expectations due to a decline in sales of its HPE servers.
In addition, after this transaction, there was no significant increase in intraday and after-hours, which added to the suspicion of this decision. Some analysts said HPE's acquisition of an established technology company like Juniper could complicate its growth plans.
Behind a big move in the industry, there must be a break in the present and an unknown in the future. However, this acquisition shows us HPE's determination to gain a firm foothold in the AI wave, and it also reflects its long-term plans to seek partners and fight against strong competitors.
What are the pros and cons?After the transaction is approved by the regulatory authorities and officially concluded, we will witness it together.