The Ministry of Justice moved on Thursday to block the $ 14 billion acquisition of Juniper Networks from Hewlett Packard Enterprise, the first deal challenged during the second term of President Trump by Antitrust enforcers.
In a lawsuit that has been brought to the United States Court for the Northern District of California, the government said that the deal “is at risk of significantly reducing competition in a critically important technology market.” The agency said that the deal would terminate a business rivival in the wireless network industry that resulted in lower prices for large companies, universities, hospitals and other buyers of complex technology systems.
The suit came in such a way that many in the American business community had expected a lighter touch under Mr. Trump to unleash a wave of Deal after four years of heavy investigation by supervisors among former President Joseph R. Biden Jr. Tech Deal suggests that there may be more consistency between the Biden and Trump administrations about enforcement of antitrust than some had thought.
Hewlett Packard Enterprise, or HPE, a company for business software and services, announced last year the acquisition of $ 14 billion from Juniper, with the hope of combining his data centers with Juniper's network company to hire giants such as Cisco.
Regulators in Great Britain and the European Union have cleared the deal this summer. But the antitrust enforcement officers of the Biden administration had what is known as a “second request” for more information, which indicates the investigation of the transaction.
The suit was brought by Omeed Assefi, tapped by Mr Trump as acting assistant -processor -general for the antitrust department of the Ministry of Justice. The nominee of Mr. Trump for the best antitundry, Gail Slater, has not yet been confirmed. Mrs. Slater previously worked as a policy advisor for vice -president JD Vance and for the National Economic Council during the first term of Mr Trump. Mr. VANCE sometimes has the efforts of Lina Khan, the Trustbustende Federal Trade Commission chairman of Mr Biden, complimented and has criticized large technology companies as 'too much power'.
Although some experts had expected Mr. Trump's antitrustwaak dogs to keep an eye on great social media companies – in accordance with two -part concerns about free speech and censorship – bankers hoped that the new administration would be better for technology companies such as HPE that fly more Under the radar.
“The threat that this merger is not theoretical,” said Mr Asfi in a statement. “Vital industries in our country – including American hospitals and small companies – rely on wireless networks to complete their missions.”
Competition from Juniper has forced HPE to “make a deep discount” and to invest in his software, the court case said. A combination of the two, claim government lawyers, would suppress innovation and force the buyers of equipment and services to pay a higher price.
HPE and Juniper are the second and third largest players in network services for business quality in the United States, with a combined share of about one fifth of the market, according to estimates of the industry. Cisco checks approximately half of the market.
The deal is also a test of how civil servants will approach companies that present their deals in terms that are tailored to Mr. Trump's “America First” agenda. In a statement, HPE called the suit of the Ministry of Justice 'fundamentally inadequate' and noted, among other things, that the combined company 'would create a mandatory alternative worldwide for established operators, which reinforces the American coreech sector that serves as the backbone of the American network infrastructure. “The deal would also strengthen national security, the company added.
“We will vigorously defend against the over -reached interpretation of the antitrust laws of the Ministry of Justice,” the company said.
Regulators investigated mergers and acquisitions heavily during the Biden administration, because officials oppose business consolidation throughout the economy. Last year the FTC stopped the supermarket chain Kroger to buy Albertsons because of fears that it would result in higher food prices, and challenged a merger between carpet and Capri, two hand -hand producers, to promote competition in the “accessible luxury” market. In 2022, the Ministry of Justice blocked the publication giant Penguin Random House of buying Simon and Schuster.
The agencies were not always successful in court. The FTC tried and failed to block Meta to buy a Virtual Reality start-up and could not prevent Microsoft from buying Activision, the video game publisher. The Ministry of Justice lost a challenge to the purchase of a company by the UnitedHealth Group that helps process the insurance claims.
Many industrial groups accused the supervisors of stifling deals that were good for consumers and expressed the hope that the next administration would follow a different approach. David Zaslav, the Chief Executive of Warner Bros. Discovery, in July said that the next president should “offer a chance for deregulation, so that companies can consolidate and do what we need to be even better.”
