Juniper Networks (NYSE: JNPR) shares jumped over 2% on Wednesday following the breaking news that Hewlett Packard Enterprise has secured financing commitments for its $14 billion acquisition of the networking gear manufacturer.
Hewlett Packard Enterprise (NYSE: HPE) plans to finance its $14 billion acquisition of Juniper Networks through term loans. The committed financing for this acquisition is set to be provided by Citigroup Global Markets Inc., JPMorgan Chase Bank N.A., and Mizuho Bank Ltd.
Per the announcement, the financing will eventually be partially replaced with a mix of new debt, mandatory convertible preferred securities, and cash on the balance sheet.
The deal marks one of the most significant committed debt financings for an M&A deal since Broadcom (NASDAQ: AVGO) obtained up to $28.4 billion in term loans to support its acquisition of VMware Inc. in August. Debt dealmakers are hopeful that an increase in M&A activity will bolster investment-grade bond volume in the current year, as the previous year marked the lowest transaction levels in a decade.
Hewlett Packard Enterprise (NYSE: HPE) will acquire Juniper Networks (NYSE: JNPR) for $40 per share in cash. The move aims to expand HPE’s presence in the networking business, though it has faced skepticism from Wall Street.
The companies plan to finalize the acquisition late this year or early 2025. The approval from both boards is in place, and the process is pending regulatory and Juniper shareholder approvals, along with other standard closing conditions.
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