The European Commission approved unconditionally the proposed acquisition of Juniper Networks by Hewlett Packard Enterprise Company (HPE). The Commission concluded that the transaction would raise no competition concerns in the European Economic Area (‘EEA’).
The Commission examined the transaction’s impact on the following markets: (i) the global market for wireless local area network (WLAN) equipment; (ii) the global market for wireless access points (WAPs); (iii) the EEA-wide market for Ethernet campus switches; and (iv) the global market for data center switches.
Following its market investigation, the Commission concluded that the transaction, as notified, would not significantly reduce competition in these markets. Specifically, regarding the horizontal overlaps between the companies’ activities in the WLAN equipment, WAPs, and Ethernet campus switches markets, the Commission determined that in the EEA:
- The merged entity’s market position would remain moderate.
- The merged entity would continue to face competition from a wide range of competitors, including strong and established players on each of the markets.
- HPE and Juniper are not each other’s closest competitors.
- Customers have a certain level of countervailing buyer power, allowing them to react in case of price increases of WLAN equipment and Ethernet campus switches.
Regarding the conglomerate links between Juniper’s switches and HPE’s activities in the global markets for high-performance computing (HPC) systems and mid-range servers, the Commission determined that in the EEA, the merged entity would not have the capability to engage in anticompetitive bundling or tying practices, because:
- The merged entity would not have a significant degree of market power either on the market for the supply of mid-range servers or on the market for the supply of HPC systems.
- Customers purchasing cycles for each of the respective products are different and therefore not conducive to allow any anticompetitive tying or bundling strategy by the merged entity.
- The merged entity would not obtain a significant advantage by offering its datacentre switches as a bundle with either HPE’s servers or HPE’s HPC systems.
- Competitors could replicate and challenge any tied or bundled products.
The Commission therefore concluded that the proposed merger would not raise competition concerns on any of the markets examined in the EEA or on any substantial part of it. It therefore cleared the transaction unconditionally.