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(Bloomberg) — Hewlett Packard Enterprise has secured a financing commitment to acquire Juniper Networks for $14 billion.
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Spring, Texas-based HPE plans to finance the acquisition with a $14 billion term loan, according to a statement released Tuesday. The committed financing will be provided by Citigroup Global Markets, Inc., JPMorgan Chase Bank NA and Mizuho Bank, Ltd., the release said.
Eventually, some of the financing will be replaced with “a combination of new debt, mandatorily convertible senior securities, and balance sheet cash,” according to the announcement.
The deal is one of the largest debt financings committed for an M&A transaction since Broadcom secured a term loan of up to $28.4 billion to finance its acquisition of VMware in August. Bond traders are optimistic that increased M&A activity will boost investment-grade debt issuance this year, despite the worst trading in a decade.
Read more: Debt traders bet on M&A resurgence to drive $1.3 trillion a year
Data center hardware maker HPE will pay Juniper $40 per share in cash, the companies said in a statement Tuesday. It’s a move that expands the company’s presence in the network business, but it’s also met with skepticism from Wall Street.
The companies expect the transaction, which has been approved by both boards of directors, to close by the end of this year or early 2025, subject to regulatory and Juniper shareholder approvals and other customary closing conditions.
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