The merger between computer networking giants Hewlett Packard Enterprise and Juniper Networks was allowed to go ahead after U.S. intelligence intervened to make it happen as a matter of national security, a source familiar with the events tells Fortune.
The feeling within the federal government was that a combined HPE-Juniper offering in the marketplace would act as a “bulwark” against Huawei in markets where the Chinese company might otherwise be more dominant because it offers a single complete tech stack, the source said.
The intervention of unspecified intelligence officials in the merger, which had been blocked by Department of Justice antitrust litigation, was first reported by Axios. Fortune can confirm, however, that fear of Huawei was the issue that triggered the approval for the merger.
“Huawei is very widely known to be closely tied to the Chinese Communist Party and its products have repeatedly been identified in the U.S. and many other countries as a threat to national security,” the source said.
“Competition is global and a combined HPE-Juniper is a stronger bulwark against that, against Huawei. It will be the only U.S.-based company that provides the entire technology stack that Huawei do.”
Huawei did not immediately return two requests for comment. HPE declined to comment when reached.
The process leading to the deal’s approval, which was linked to two senior DOJ officials losing their jobs, briefly drew the ire of Laura Loomer, the right-wing online provocateur. On social media, she alleged that HPE had paid two consultants allied to President Trump $1 million each to engage in “influence peddling.” Loomer later deleted the allegation.
Two sources told Fortune they were baffled by Loomer’s intervention.
This story was originally featured on Fortune.com
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