- HPE’s $14 billion Juniper Networks acquisition faces renewed uncertainty despite DOJ approval, amid online conspiracy theories and political objections. A federal judge may review whether the merger is in the public interest, the result of controversy over a reversal of the DOJ’s initial opposition. Also, somehow Laura Loomer is involved, and no one knows why. HPE’s stock is down, and CEO Antonio Neri remains under pressure from activist investor Elliott Investment Management, which holds a $1.5 billion long position in the shares.
When Hewlett Packard Enterprise CEO Antonio Neri won a reversal from the U.S. Department of Justice, allowing HPE’s $14 billion acquisition of Juniper Networks to go ahead, he could have been forgiven for thinking his troubles were behind him.
Instead, HPE has been dragged into one of those weird MAGA conspiracy theories that orbit President Trump’s White House. Even Laura Loomer, the vituperous online Trump activist, somehow got involved.
Given that the DOJ dropped its opposition to the merger (it previously complained it would reduce market competition), Neri could reasonably have expected the federal judge overseeing the litigation to wave the deal through.
But because the DOJ’s sudden reversal got the gears whirring inside the brains of multiple online sleuths, resulting in an objection letter from Sen. Elizabeth Warren, it is suddenly more likely—perhaps not probable, but plausible—that Judge P. Casey Pitts will hold a “Tunney review” that may overturn the deal.
A “Tunney review” is a judicial proceeding that asks whether a proposed merger is in the public interest. The Tunney Act was created in the 1970s in reaction to President Nixon’s meddling in the M&A market.
A negative Tunney review would be a defeat for Neri, who is fending off activist Elliott Investment Management, which bought a $1.5 billion stake in the company and demanded seats on the board in part because it believes HPE stock is being held down by execution errors on Neri’s watch. Neri could lose his job if things do not go his way, sources have told Fortune.
How did HPE get here?
For its part, HPE believes it has done nothing wrong, and that it has simply prevailed in a routine judicial process.
“HPE is confident our acquisition of Juniper Networks is in the public interest and will promote further competition in the enterprise WLAN [wireless local area network] market,” the company told Fortune. “The transaction was appropriately approved with certain remedies by the U.S. Department of Justice, and it was unconditionally approved by 13 other antitrust regulators around the world. We respect the role our regulators play in maintaining competitive markets and appreciate the professional and constructive way in which the DOJ engaged with us in approving the deal.”
But several online corporate dirt-diggers, including Matt Stoller, Francine McKenna, The Lever, and The Capitol Forum, drew attention to personnel changes at the DOJ immediately prior to its approval of the deal. Two DOJ lawyers on the case appear to have been removed from it, according to Semafor. Now HPE is on the front page of the Wall Street Journal as Exhibit 1 in the narrative that lobbyists are undercutting the MAGA antitrust agenda by making off-the-record promises about new jobs in the U.S. (HPE denied that, too.)
In a filing on the federal court docket, HPE listed its advisors on the deal. They included a person whom Sen. Warren’s letter described as “MAGA-aligned antitrust thought leader Mike Davis,” quoting from a Capitol Forum article.
It is this person that Stoller and his online colleagues believe is a lobbyist responsible for changing the minds of Attorney General Pam Bondi and her chief of staff, Chad Mizelle, and thus reversing their opposition to the deal.
Following that, Loomer used X to insist that HPE had paid consultants allied to President Trump $1 million each to engage in “influence peddling.” Loomer later deleted the post. Sources previously told Fortune they didn’t understand why Loomer was paying attention to the deal.
The Lever published a claim that “in a last-minute effort to save face … intelligence authorities intervened to rubber-stamp the deal because of national security reasons, a claim that never appeared in any of the DOJ and HP’s legal briefs.” In fact, HPE did cite national security in its July 7 certification of the proposed judgment approving the deal. (You can see it here on page 2.) The national security angle is that by combining HPE and Juniper it creates a larger market share for a U.S. company in places where the alternative might be Huawei, which many Western governments regard as a Chinese Communist Party asset. (Huawei has repeatedly denied that allegation.)
The next step is up to Judge Pitts. It is not clear-cut that Pitts will rubber-stamp the DOJ’s decision. Pitts is a Biden appointee who previously worked at a public interest law firm—and he may therefore be skeptical that Trump’s DOJ went from fierce opposition to “whatever” so quickly.
His ruling is likely months away.
The DOJ told Fortune: “The Department has consistently reiterated that resolution of this merger was based only on the merits of the transaction,” according to spokesman Gates McGavick.
Meanwhile, HPE stock has not reacted well to all the gossip. It remains down 5.7% year to date compared with the S&P 500, which is up 8%. Elliott’s stake is a long position—meaning it wants shares to rise. And it is more than willing to replace the CEO if it does not get what it wants. Hence the pressure on Neri.
