HP acquires Wi-Fi ace Aruba

$3bn purchase designed to boost HP's position in $18bn campus networking sector

HP has confirmed rumours it is acquiring Aruba Networks, revealing it is laying down $3bn (£1.9bn) to buy the world's largest specialist wireless LAN vendor.

HP said today it has reached a definitive agreement to buy the wireless networking maestro in a move it claims will "create a leading competitor in the $18bn campus networking sector" after the deal is closed in its second half.

Aruba CEO Dominic Orr will stay on to lead a new combined organisation that will report to HP Enterprise Group head Antonio Neri.

With revenues last year of $729m and about 1,800 staff, Aruba has enjoyed compound annual growth over the past five years, according to HP.

Confirmation of the deal follows a report last week from Bloomberg claiming the duo were in talks.

"Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investments to the new style of IT," said HP chief executive Meg Whitman.

"By combining Aruba's world-class wireless mobility solutions with HP's leading switching portfolio, HP will offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks."

Orr, who will lead the new unit alongside Aruba CTO Keerti Melkote, said: "Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking."

The equity value of the transaction is about $3bn, and net of cash and debt approximately $2.7bn.

According to IDC, Aruba boasted a 12 per cent share of the enterprise WLAN market in Q2 last year, compared with HP's 4.5 per cent share of the overall WLAN market.