Share of Hewlett Packard Enterprise rose 14.7% and Juniper Networks rose 8.5% in premarket trading Monday.
The Justice Department settled its lawsuit challenging Hewlett Packard Enterprise’s $13 billion takeover of Juniper Networks, less than two weeks before a trial was set to start.
The settlement was disclosed in court filings late Friday and will require the combined company to sell HPE’s Instant On wireless networking business and auction off a license to Juniper’s competing Mist business.
The settlement must be approved by a court but would negate the need for a trial that was set to start July 9 in San Jose, California.
“Our agreement with the DOJ paves the way to close HPE’s acquisition of Juniper Networks and preserves the intended benefits of this deal for our customers and shareholders, while creating greater competition in the global networking market,” Antonio Neri, HPE’s president and chief executive officer, said in a joint statement with Juniper. He said the new network will support AI workloads.
“This novel approach by the Justice Department reflects a commitment to solving unique challenges in mergers,” the DOJ said in a statement.
The result was “otherwise unavailable through litigation,” the department said. Had the DOJ won at trial, it would have blocked the deal outright rather that simply force the sale of one piece of the company.
The antitrust suit was the first brought by the Justice Department under President Donald Trump, an indication the administration may continue an aggressive stance on corporate consolidation pursued by the agency under the Biden administration.
But antitrust enforcers under Trump have since stated their willingness to settle merger cases when appropriate, something that seldom happened under their predecessors.
In a complaint filed in federal court in late January, the US said the deal would consolidate the sector from three major players — HPE, Juniper and Cisco Systems Inc. — down to two that would control 70% of the market.
According to the lawsuit, rising competition from Juniper forced HPE to discount its products and develop new features in a campaign to “Beat Mist.” Salespeople were trained to better compete with Juniper, and competitive intelligence about Juniper continued to be shared within HPE even after the acquisition was announced, according to the complaint.
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