Hewlett Packard Enterprise (HPE) is poised to receive unconditional approval from European Union regulators for its $14 billion acquisition of networking equipment maker Juniper Networks.

The European Commission, which has until 1 August to make its decision, is expected to give the nod to the deal without requiring any concessions, according to sources cited by Reuters. This move comes as companies rush to upgrade their infrastructure to meet the growing demand for artificial intelligence-driven services.

HPE announced the acquisition in January, describing it as a "highly complementary combination" that would enhance "secure, unified, cloud and AI-native networking to drive innovation from edge to cloud to exascale". The all-cash transaction values Juniper at $40 per share, representing a 32.4 per cent premium on the stock's previous closing price.

The deal is set to double HPE's networking business, providing it with a comprehensive portfolio of solutions for customers and partners. HPE's chief executive officer, Antonio Neri, stated that the merger would "strengthen HPE's position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers".

Industry experts note that HPE was likely to emphasise the market power of rival Cisco to allay any potential competition concerns from EU regulators. Juniper shareholders overwhelmingly approved the deal in April, with less than 1 per cent voting against it.

While the EU appears set to approve the acquisition, the UK's Competition and Markets Authority (CMA) is conducting its own investigation. The CMA is due to announce by 14 August whether it will refer the merger for a more in-depth Phase 2 investigation.

HPE initially expected to close the acquisition by the end of 2024 or early 2025. However, the company has stated it will work with the CMA to complete necessary reviews and secure clearance as soon as possible.

The move comes as HPE's Server division saw significant growth in its Q2 earnings for fiscal year 2024, with revenue more than doubling from the previous quarter thanks to AI-related demand.

---