Juniper Networks: For Sale or Not?

Scott Ferguson
11/30/2017

For a brief few hours this week, the Internet buzzed with reports that Nokia was preparing a $16 billion-deal for Juniper Networks that would marry together both companies' routing and switching business along with security and other features.

A few hours after CNBC reported the deal on November 29, Nokia issued a denial of the story, noting: "Nokia is not currently in talks with, nor is it preparing an offer for, Juniper Networks related to an acquisition of that company."

CNBC reported the Nokia Corp. (NYSE: NOK) denial but did not back down from its original report. Juniper Networks Inc. (NYSE: JNPR), for its part, has remained silent, even after its stock got an overnight bump from the news. On Thursday, November 30, the company's stock was trading at about $28.16 per share at mid-morning.

Rumor mill
(Source: Juniper Networks)
Rumor mill
(Source: Juniper Networks)

As Light Reading Editor-in-Chief Craig Matsumoto wrote on Thursday, a deal between Nokia and Juniper would create a telecom and enterprise behemoth with deep roots in switches and routing, as well as security. Nokia has aimed big before, with its $17 billion deal for Alcatel-Lucent. (See Update: Nokia Denies Reports of Juniper Deal.)

One problem with big acquisitions such as Nokia and Juniper, is that these deals are too big. Matsumoto pointed out that for a while it seemed that Cisco Systems Inc. (Nasdaq: CSCO) and Ericsson AB (Nasdaq: ERIC) would merge to form a megafirm, but those rumors eventually ran their course.


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That's not to say Juniper is not shopping itself around. The company has been struggling in the second half of the year, with CEO Rami Rahim noting during a recent earnings call that many of the company's hyper-scale customers are re-architecting their data centers and that's caused delays in purchases of switches and other products. (See Juniper's Cloud Woes Likely to Continue Into Q4.)

Juniper has also talked about "realignment" of staff, which could lead to layoffs, but that is not confirmed.

For more information, see the related story on ECN's parent site, Light Reading.

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

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mhhfive
mhhfive
12/3/2017 | 1:17:07 PM
Re: Deal
Does a merger solve any of Juniper's fundamental woes? I think not -- at least in this case. It may give Juniper extra runway but I don't quite see the synergy between the two companies. Maybe I'm missing something?
maryam@impact
[email protected]
11/30/2017 | 11:48:05 PM
Re: Deal
Acquisitions are always tricky because I have never worked on one that turned out the way it was expected. Molding and melding technology and people is no simple task. There is always a process of pruning and refining which strips out some things and grows other areas. At times the process just doesn't work and bits and pieces of the acquired entity end up being morphed. I  always look at acquisition as a process even after they are technically complete.
danielcawrey
danielcawrey
11/30/2017 | 1:20:59 PM
Deal
This deal would certainly meld hardware and software with services together, creating a formidable entity that could compete with big players. I think it's a good competitive strategy. 
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