U.S. sues to block tech deal in first antitrust action of Trump’s term
The Justice Department moved on Thursday to block Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks. This is the first deal that has been challenged by antitrust enforcement during President Trump’s 2nd term. But the attempt this week to stop the tech deal suggests there may be more consistency between the Biden and Trump administrations on antitrust enforcement than some had thought.
Hewlett Packard Enterprise, or HPE, a business software and services company, announced the $14 billion takeover of Juniper last year, with hopes of combining its data centers with Juniper’s networking business to take on giants like Cisco.
Regulators in Britain and the European Union cleared the deal this summer. But the Biden administration’s antitrust enforcers had issued what is known as a “second request” for more information, indicating scrutiny of the transaction.
The suit was brought by Omeed Assefi, tapped by Mr. Trump to be the acting assistant attorney general for the Antitrust Division of the Justice Department. Gail Slater is Mr. Trump’s nomination for the top antitrust position. She has not yet been confirmed. Ms. Slater was a policy advisor for Vice President JDVance and the National Economic Council in Mr. Trump’s initial term. Mr. Assefi stated that the threat posed by this merger is not theoretical. “Vital industries in our country — including American hospitals and small businesses — rely on wireless networks to complete their missions.”
Competition from Juniper has forced HPE to “discount deeply” and invest in its software, the lawsuit said. Government lawyers claim that combining the two would stifle the innovation and force buyers of equipment and service to pay more. Cisco controls approximately half of the market.
The transaction is also a test to see how officials will respond to companies who present their deals aligned with President Trump’s “America First agenda”. In a statement, HPE called the Justice Department’s suit “fundamentally flawed” and, among other things, noted that the combined company would create “a compelling, U.S.-based alternative globally to incumbents, fortifying the American ‘core tech’ sector that serves as the backbone of U.S. networking infrastructure.” The deal would also bolster national security, the company added.
“We will vigorously defend against the Department of Justice’s overreaching interpretation of antitrust laws,” the company said.
Regulators heavily scrutinized mergers and acquisitions during the Biden administration, as officials resisted corporate consolidation across the economy. The F.T.C. The F.T.C. In 2022, Justice Department prevented Penguin Random House from acquiring Simon and Schuster. The F.T.C. The F.T.C. The Justice Department lost its challenge to UnitedHealth Group’s purchase of an insurance claims processing company. David Zaslav is the chief executive officer of Warner Bros. Discovery said in July that a new president should provide an “opportunity for deregulation so companies can consolidate, and do what we need, to be better.”
