HPE to acquire Juniper Networks for $14 billion
Antonio Neri, president and chief executive officer of Hewitt Packerd Enterprise (HPE), speaks during the HPE Discovery CIO Summit in Las Vegas, Nevada, U.S., on Tuesday, June 19, 2018. The summit brings together experts and industry leaders to explore the critical elements CIO’s must address to enable speed and agility, including people, use of data and approaches to security, governance and control. Photographer: Bridget Bennett/Bloomberg via Getty Images
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Hewlett Packard Enterprise said it’s agreed to buy networking gear vendor Juniper Networks for about $14 billion, or $40 per share, in an all-cash deal.
HPE expects to close the deal late this year or in early 2025, the company said in a statement. The announcement came a day after the Wall Street Journal reported that the companies were in late-stage talks.
Juniper shares had their best day in 20 years on Tuesday after the Journal report, which said a deal could be announced this week. The shares jumped 22% to close at $37.05. The purchase price of $40 a share represents a 32% premium over Monday’s close before the Journal story published.
HPE said the deal would be accretive to its adjusted earnings per share in the first year after it closes.
The acquisition would double HPE’s existing networking business after years of competition. If it’s completed, Juniper CEO Rami Rahim would lead the combined group and report to HPE’s CEO, Antonio Neri, according to the statement.
Hewlett-Packard went deeper in networking when it bought Aruba Networks in 2015. Months later, HP split in two, resulting in the formation of HPE, which sells servers and other equipment for data centers, and HP Inc., which makes PCs and printers.
HPE said adding Juniper to its portfolio would bolster margins and speed up growth.
Founded in 1996, Juniper spent many years chasing Cisco in the market for networking gear. Revenue grew 12% year over year in 2022, the fastest growth since 2010. In the most recent quarter, Juniper eked out a $76 million profit on $1.4 billion in revenue, which declined 1% from the prior year.
HPE’s networking segment was the company’s top source of earnings before taxes, at $401 million on $1.4 billion in revenue, which was up 41%.
Coming together would lead to $450 million in annual cost savings within three years of the deal’s completion, HPE said.
The two companies will discuss the deal on a conference call starting at 8:30 a.m. ET on Wednesday.
JPMorgan and Qatalyst advised HPE, according to the statement.
— CNBC’s Ari Levy contributed to this report.
IBM CEO Arvind Krishna appears at the World Economic Forum in Davos, Switzerland, on Jan. 16, 2024.
Stefan Wermuth | Bloomberg | Getty Images
IBM shares fell as much as 5% in extended trading on Wednesday after the tech conglomerate issued second-quarter results that topped Wall Street projections.
Here’s how the company did in comparison with LSEG consensus:
- Earnings per share: $2.80 adjusted vs. $2.64 expected
- Revenue: $16.98 billion vs. $16.59 billion
IBM’s revenue increased nearly 8% year over year in the quarter, according to a statement. Growth in the first quarter was below 1%. Net income, which includes costs related to acquisitions, rose to $2.19 billion, or $2.31 per share, from $1.83 billion, or $1.96 per share, a year ago.
Software revenue climbed about 10% to $7.39 billion, exceeding the $7.43 billion consensus among analysts surveyed by StreetAccount. Hybrid cloud revenue, including Red Hat, showed 16% growth. The software unit’s gross margin of 83.9% was barely narrower than StreetAccount’s 84.0% consensus.
Revenue from consulting rose almost 3% to $5.31 billion, higher than StreetAccount’s $5.16 billion consensus. Infrastructure revenue went up 14% to $4.14 billion, above the $3.75 billion StreetAccount average estimate.
During the quarter, IBM announced the next-generation z17 mainframe computer and the acquisition of data and artificial intelligence consulting firm Hakkoda.
IBM called for over $13.5 billion in 2025 free cash flow, similar to a projection from April. The company still sees at least 5% revenue growth at constant currency for the year.
As of Wednesday’s close, IBM shares were up 28% so far in 2025, while the S&P 500 index has gained around 8% in the same period.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
This is breaking news. Please check back for updates.
WATCH: Cramer’s Stop Trading: IBM
The Texas Instruments headquarters in Dallas, Texas, US, on Sunday, Jan. 21, 2024.
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Texas Instruments shares plunged 12% after the automotive and industrial semiconductor supplier warned of ongoing tariff aftershocks.
The company said it expects third-quarter earnings between $1.36 and $1.60 per share, a midpoint of $1.48 per share. That fell short of an LSEG estimate of $1.50.
Texas Instruments anticipates revenues between $4.45 billion and $4.48 billion. The midpoint of $4.63 billion was slightly ahead of the $4.59 billion expected by analysts.
In an earnings call with analysts, CEO Haviv Ilan said the company is experiencing a “shallow” recovery in the automotive sector and said customers may have lingering worries over tariffs and geopolitical uncertainty.
Despite the post-earnings slump, Texas Instruments posted a 16% year-over-year jump in revenue. The company reported earnings of $1.41 per share on $4.45 billion in revenue, surpassing the earnings of $1.35 per share on $4.36 billion in revenue expected by LSEG analysts.
Ilan said that some of the second-quarter strength may have come from a pull forward in demand to acquire inventory ahead of tariffs.
Net income for the company rose 15% to $1.3 billion, or $1.41 per share, from $1.13 billion, or $1.22 per share, a year ago.
WATCH: Texas Instruments shares fall more than 7% despite quarterly beat
CNBC’s Kif Leswing contributed to this story.
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