HPE to Acquire Juniper Networks to Accelerate AI-Driven Innovation

Hewlett Packard Enterprise (NYSE: HPE) and Juniper Networks, Inc. (NYSE: JNPR), a leader in AI-native networks, today announced that the companies have entered a definitive agreement under which HPE will acquire Juniper in an all cash transaction for $40.00 per share, representing an equity value of approximately $14 billion.

The combination of HPE and Juniper advances HPE’s portfolio mix shift toward higher-growth
solutions and strengthens its high-margin networking business, accelerating HPE’s sustainable
profitable growth strategy. The transaction is expected to be accretive to non-GAAP EPS and free
cash flow in the first year post close.

The acquisition is expected to double HPE’s networking business, creating a new networking leader
with a comprehensive portfolio that presents customers and partners with a compelling new choice
to drive business value. The explosion of AI and hybrid cloud-driven business is accelerating demand
for secure, unified technology solutions that connect, protect, and analyze companies’ data from
edge to cloud. These trends, and AI specifically, will continue to be the most disruptive workloads for
companies, and HPE has been aligning its portfolio to capitalize on these substantial IT trends with
networking as a critical connective component.

Combining HPE and Juniper’s complementary portfolios supercharges HPE’s edge-to-cloud strategy
with an ability to lead in an AI-native environment based on a foundational cloud-native
architecture. Together, HPE and Juniper will provide customers of all sizes with a complete, secure
portfolio that enables the networking architecture necessary to manage and simplify their expanding
and increasingly complex connectivity needs. Leveraging industry-leading AI, the combined company is expected to create better user and operator experiences, benefitting customers’ highperformance networks and cloud data centers.
Through its suite of cloud-delivered networking solutions, software, and services including the Mist
AI and Cloud platform, Juniper helps organizations securely and efficiently access the mission-critical
cloud infrastructure that serves as the foundation of digital and AI strategies. The combination with
HPE Aruba Networking and purposely designed HPE AI interconnect fabric will bring together
enterprise reach, and cloud-native and AI-native management and control, to create a premier
industry player that will accelerate innovation to deliver further modernized networking optimized
for hybrid cloud and AI.

Upon completion of the transaction, Juniper CEO Rami Rahim will lead the combined HPE
networking business, reporting to HPE President and CEO Antonio Neri.

“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change
the dynamics in the networking market and provide customers and partners with a new alternative
that meets their toughest demands,” said Neri. “This transaction will strengthen HPE’s position at
the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further
innovation for customers as we help bridge the AI-native and cloud-native worlds, while also
generating significant value for shareholders. I am excited to welcome Juniper’s talented employees
to our team as we bring together two companies with complementary portfolios and proven track
records of driving innovation within the industry.”

“Our multi-year focus on innovative, secure AI-native solutions has driven Juniper Networks’
outstanding performance,” said Rami Rahim, CEO of Juniper Networks. “We have successfully
delivered exceptional user experiences and simplified operations, and by joining HPE, I believe we
can accelerate the next phase of our journey. In addition, this combination maximizes value for our
shareholders through a meaningful all-cash premium. We look forward to working with the talented
HPE team to drive innovation for enterprise, service provider and cloud customers across all
domains, including campus, branch, data center and the wide area network.”

• Compelling pro forma financial profile. In addition to the expected non-GAAP accretion, the
  combined company is expected to have attractive top- and bottom-line growth
  opportunities immediately and in the long term.
• Positions HPE for long-term growth for shareholders and greater investment capacity.
  With Juniper, HPE’s portfolio will be weighted toward higher-growth, higher-margin
  businesses with large free cash flow potential, positioning HPE to enhance shareholder
  return and enabling additional investments in high-growth areas, such as AI and cloud. On a
  pro forma basis, the new networking segment will increase from approximately 18% of total
  HPE revenue as of fiscal year 2023 to approximately 31%1
  and contribute more than 56%1,2
  of HPE’s total operating income.
• Complementary capabilities to deliver next-generation AI-native networking and enable
  new digital experiences through secure, intelligent connectivity. Networking will become
  the new core business and architecture foundation for HPE’s Hybrid Cloud and AI solutions
  delivered through our HPE GreenLake hybrid cloud platform. The combined company will
  offer secure, end-to-end AI-native solutions that are built on the foundation of cloud, high
  performance, and experience-first, and will also have the ability to collect, analyze, and act on aggregated telemetry across a broader installed base. This will drive even better end-userbexperiences and streamlined network operations for our customers.
• Accelerates HPE’s strategic evolution and expands total addressable market. The
  acquisition increases the scope of HPE’s networking business and will create meaningful
  opportunities to provide even more comprehensive solutions to Juniper’s installed base of
  enterprise customers, communication service providers and tier-one cloud customers, as
  well as launches HPE into adjacent large segments, including data center networking,
  firewalls, and routers. It also grows Juniper’s footprint in data centers and cloud providers.

Transaction Details and Approvals
Under the terms of the agreement, which has been unanimously approved by the Boards of
Directors of HPE and Juniper, Juniper shareholders will receive $40.00 per share in cash upon the
completion of the transaction. The purchase price represents a premium of approximately 32% to
the unaffected closing price of Juniper’s common stock on January 8, 2024, the last full trading day
prior to media reports regarding a possible transaction.

The transaction is expected to be funded based on financing commitments for $14 billion in term
loans. Such financing will ultimately be replaced, in part, with a combination of new debt,
mandatory convertible preferred securities, and cash on the balance sheet. The transaction is
currently expected to close in late calendar year 2024 or early calendar year 2025, subject to receipt
of regulatory approvals, approval of the transaction by Juniper shareholders, and satisfaction of
other customary closing conditions.

The combination is expected to achieve operating efficiencies and run-rate annual cost synergies of
$450 million within 36 months post close. Strong growth in free cash flow, along with maintenance
of capital allocation policies, are expected to provide sufficient room to reduce leverage to
approximately 2x in two years post close. Following the completion of the transaction, HPE will
continue its innovation and go-to-market investments in its networking business, one of its growth
engines.