Trump trustbusters flash a clear M&A signal
Compared to, say, arguments over oddball theories of harm, this case is straightforward. HPE is a goliath in providing technical gear and services to big businesses.
Published: 04:02 PM,Feb 01,2025 | EDITED : 08:02 PM,Feb 01,2025
الرئيس الإمريكي دونالد ترامب
Everyone from the boss of Goldman Sachs to starry-eyed investors expects corporate matchmakers to enjoy a renaissance under President Donald Trump. After all, his predecessor’s trustbusters subjected mergers to extraordinary scrutiny, attempting to block them for novel, difficult-to-predict reasons. Yet not even two weeks into the new administration, the Department of Justice sued to stop Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks. While new leadership is not yet in place, the fact it happened signals at least some continuity.
Compared to, say, arguments over oddball theories of harm, this case is straightforward. HPE is a goliath in providing technical gear and services to big businesses. Among those is wirelessly connecting computers and equipment like printers. Juniper is an insurgent, breaking through with an artificial intelligence-infused offering dubbed Mist that helps companies keep networks running smoothly.
By 2023’s end, just before the deal was announced, revenue from Mist and its associated products was growing by nearly 70% annually. It looks like an entrenched incumbent is stomping out nascent competition. A quoted email from one HPE sales executive sums it up. Both companies are much smaller than Cisco Systems, which has roughly 42% of the market, according to consultancy IDC. But a combined HPE-Juniper would be a solid second, resulting in a duopoly with over 70% percent of the US market, according to the complaint.
Investors were caught flat-footed by reports of a possible lawsuit after lifting Juniper’s stock towards the $40 per share offered by HPE. Perhaps they should have expected a blast from the past: deal reviews are run by staff that will still largely be in place. The department is led by acting head Omeed Assafi until Trump’s permanent nominee Gail Slater secures confirmation.
Still, Assefi served in Trump’s last DOJ and told staff not to expect any “relaxation” of enforcement, Bloomberg reported. Besides, the last time Republicans held the White House, it was not quite a laissez-faire, anything-goes era. The rate of deal challenges held roughly steady compared to the Obama administration. Caveats are warranted given Trump is hardly afraid to break violently with the past such as freezing civil rights litigation or trying to stop federal spending. Things will change – but maybe not quite as much as bankers might hope.
Compared to, say, arguments over oddball theories of harm, this case is straightforward. HPE is a goliath in providing technical gear and services to big businesses. Among those is wirelessly connecting computers and equipment like printers. Juniper is an insurgent, breaking through with an artificial intelligence-infused offering dubbed Mist that helps companies keep networks running smoothly.
By 2023’s end, just before the deal was announced, revenue from Mist and its associated products was growing by nearly 70% annually. It looks like an entrenched incumbent is stomping out nascent competition. A quoted email from one HPE sales executive sums it up. Both companies are much smaller than Cisco Systems, which has roughly 42% of the market, according to consultancy IDC. But a combined HPE-Juniper would be a solid second, resulting in a duopoly with over 70% percent of the US market, according to the complaint.
Investors were caught flat-footed by reports of a possible lawsuit after lifting Juniper’s stock towards the $40 per share offered by HPE. Perhaps they should have expected a blast from the past: deal reviews are run by staff that will still largely be in place. The department is led by acting head Omeed Assafi until Trump’s permanent nominee Gail Slater secures confirmation.
Still, Assefi served in Trump’s last DOJ and told staff not to expect any “relaxation” of enforcement, Bloomberg reported. Besides, the last time Republicans held the White House, it was not quite a laissez-faire, anything-goes era. The rate of deal challenges held roughly steady compared to the Obama administration. Caveats are warranted given Trump is hardly afraid to break violently with the past such as freezing civil rights litigation or trying to stop federal spending. Things will change – but maybe not quite as much as bankers might hope.