Hewlett Packard Enterprise (HPE), a major player in enterprise IT solutions, is expected to secure unconditional EU antitrust approval for its $14 billion acquisition of Juniper Networks (JNPR), a leading provider of networking solutions, according to an exclusive Reuters report. HPE announced the deal earlier this year.
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The European Commission’s decision is due by August 1, while Britain’s antitrust enforcer will decide on the approval of the deal by August 14. The British competition regulator is investigating whether the transaction will lead to competition issues.
Importance of Juniper Deal for HPE
The deal is crucial for HPE because it will shift the company’s focus to areas with more growth and better profit margins, greatly boosting its free cash flow. It will also help HPE improve returns for shareholders and invest more in growth areas like artificial intelligence (AI).
HPE expects the acquisition to double its networking business, making networking a core component and architectural foundation for its Hybrid Cloud and AI solutions.
Moreover, the deal will boost HPE’s earnings, accelerate long-term revenue growth, and expand both its gross and operating margins.
What Is the Projection for HPE Stock?
Analysts remain sidelined about HPE stock, with a Hold consensus rating based on two Buys and eight Holds. Over the past year, HPE has increased by more than 10%, and the average HPE price target of $20.78 implies an upside potential of 6.5% from current levels.
