The Justice Department sued to block Hewlett Packard Enterprise's $14 billion acquisition of rival Juniper Networks on Thursday, the first attempt to stop a merger by a new Trump administration that is expected to take a softer approach to mergers.
The Justice complaint alleges that Hewlett Packer Enterprise, under increased competitive pressure from the fast-rising Juniper, was forced to discount products and services and invest more in its own innovation, eventually leading the company to simply buy its rival.
The lawsuit said that the combination of businesses would eliminate competition, raise prices and reduce innovation.
HPE and Juniper issued a joint statement Thursday, saying the companies strongly oppose the DOJ's decision.
鈥淲e will vigorously defend against the Department of Justice鈥檚 overreaching interpretation of antitrust laws and will demonstrate how this transaction will provide customers with greater innovation and choice, positively change the dynamics in the networking market,鈥 the companies said.
The combined company would create more competition, not less, the companies said.
The Justice Department's intervention 鈥 the first of the new administration and just 10 days after Donald Trump's inauguration 鈥 comes as somewhat of a surprise. Most predicted a second Trump administration to ease up on antitrust enforcement and be more receptive to mergers and deal-making after years of hypervigilance under former President Joe Biden鈥檚 watch.
Hewlett Packard Enterprise that it was buying Juniper Networks for $40 a share in a deal expected to double HPE鈥檚 networking business.
In its complaint, the government painted a picture of Hewlett Packard Enterprise as a company desperate to keep up with a smaller rival that was taking its business.
HPE salespeople were concerned about the 鈥淛uniper threat,鈥 the complaint said, also alleging that one former executive told his team that 鈥渢here are no rules in a street fight,鈥 encouraging them to 鈥渒ill鈥 Juniper when competing for sales opportunities.
The Justice Department said that Hewlett Packard Enterprise and Juniper are the U.S.'s second- and third-largest providers of wireless local area network (WLAN) products and services for businesses.
鈥淭he proposed transaction between HPE and Juniper, if allowed to proceed, would further consolidate an already highly concentrated market 鈥 and leave U.S. enterprises facing two companies commanding over 70% of the market,鈥 the complaint said, adding that Cisco Systems was the industry leader.
Many businesses and investors accused Biden regulatory agencies of antitrust overreach and were administration.
Under Biden, the Federal Trade Commission sued to block a that would have been the largest grocery store merger in U.S. history. Two judges agreed with the FTC鈥檚 case, blocking the proposed deal in December.
In 2023, the Department of Justice, through the courts, forced American and JetBlue airlines to in the northeast U.S., saying it would reduce competition and eventually cost consumers hundreds of millions of dollars a year. That partnership had the blessing of the Trump administration when it took effect in early 2021.
U.S. regulators also proposed last year for maintaining an 鈥渁busive monopoly鈥 through its market-dominate search engine, Chrome. Court hearings on Google鈥檚 punishment are scheduled to begin in April, with the judge aiming to issue a final decision before Labor Day. It鈥檚 unclear where the Trump administration stands on the case.
One merger that both Trump and Biden agreed shouldn鈥檛 go through is Nippon Steel鈥檚 proposed acquisition of U.S. Steel. Biden blocked just before his term ended. The companies challenged that decision in a federal lawsuit early this year.
Trump has , questioning why U.S. Steel would sell itself to a foreign company given the regime of new tariffs he has vowed.
