States gain standing in antitrust case over HPE’s $14B Juniper deal, adding a regulatory overhang to an already-closed transaction

What happened

A U.S. judge has ruled that a group of states can intervene in the antitrust case tied to Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks, even though the Department of Justice has already proposed a settlement that would allow the deal to go forward. That DOJ settlement, alongside EU and UK approvals, previously enabled HPE to close the Juniper transaction with remedies such as divesting its Instant On Wi‑Fi business and licensing portions of Juniper’s Mist AI code. The court’s decision to let state attorneys general join the case signals continued scrutiny of whether those remedies are sufficient to protect competition in enterprise networking. This development comes as HPE is already integrating Juniper and has reported networking-driven gains in Annualized Revenue Run-rate to roughly $3.1 billion, reinforcing its positioning as the #2 challenger to Cisco. The new legal twist raises uncertainty around the final shape and timing of U.S. remedies but does not yet alter the strategic logic of the Juniper deal or HPE’s broader pivot to software-rich, recurring revenue models.

Implication

For investors, the key takeaway is that regulatory risk around the Juniper transaction has risen at the margin, and it may take longer than expected to reach a clean, final U.S. resolution on remedies. The most probable outcomes are either court approval of the existing DOJ settlement or incremental behavioral/structural conditions, which could modestly reduce Juniper-related cost or revenue synergies but are unlikely to erase the strategic benefit of a larger networking footprint. A more adverse tail scenario—such as a requirement to divest additional overlapping assets or revisit elements of the deal structure—would dampen the upside case and could temporarily pressure the stock, but it currently appears lower probability. Near term, investors should watch for any indication that state-led intervention could delay integration milestones, alter the Instant On/Mist AI remedy package, or materially change HPE’s networking roadmap. Until there is more clarity from the court, HPE’s valuation may carry a somewhat wider risk premium, but the combination of discounted DCF value, rising software-rich ARR, and moderate leverage still supports a constructive stance for patient holders.

Thesis delta

The core BUY thesis remains intact: HPE still offers attractive upside as it shifts toward software-rich, recurring revenue and scales networking via Juniper, but the risk profile has incrementally worsened due to heightened U.S. regulatory uncertainty. We now treat DOJ and state-level remedy negotiations as a primary watch item, with a base case of either the current settlement being affirmed or slightly tougher conditions that trim but do not derail expected Juniper synergies. As a result, we see a somewhat wider dispersion around the timing and magnitude of networking-driven earnings contribution, while maintaining a positive long-term view on the combined platform.