Hewlett Packard Enterprise will buy networking gear-maker Juniper Networks for $14 billion in an all-cash deal in an attempt to spruce up the company’s artificial intelligence (AI) offerings. 

Hewlett Packard has offered $40 per share to Juniper shareholders, the companies have said. That represents a 32.4 per cent premium to the stock’s close on Monday, when the news of the deal first emerged. 

The acquisition comes at a time when the AI gold rush has led companies to pour billions of dollars into upgrading and developing new wares and is expected to double Hewlett Packard’s networking business. 

Hewlett Packard, grappling with sluggish demand in its traditional server business, is looking to tap into Juniper’s offerings such as network security and AI-enabled enterprise networking operations. 

Weak demand from inflation-hit wireless carriers and cable operators, as well as stiff competition from Cisco Systems and Nvidia in the networking space has been a drag on Juniper. 

Shares of Juniper were up 0.5 per cent in extended trading after the bell on Wednesay , while those of Hewlett Packard were largely flat.  

The deal is expected to be accretive to Hewlett Packard’s non-GAAP earnings and free cash flow in the first year post completion, the companies have said. 

The transaction is expected to be funded through financing commitments for $14 billion in term loans and is likely to close in late 2024 or early 2025, subject to regulatory approvals.