The US Department of Justice filed a lawsuit on Thursday in an attempt to block Hewlett Packard Enterprise's (HPE) proposed $14 billion acquisition for Juniper Networks (JNPR), arguing the combination would significantly reduce competition.

In a complaint filed in the Northern District of California, the DOJ said the transaction would "eliminate fierce head-to-head competition" between the second- and third-largest providers of wireless local area network, or WLAN, solutions in the US.

"This proposed merger would significantly reduce competition and weaken innovation, resulting in large segments of the American economy paying more for less from wireless technology providers," Acting Assistant Attorney General Omeed Assefi of DOJ's antitrust division said in a statement.

"Vital industries in our country -- including American hospitals and small businesses -- rely on wireless networks to complete their missions," Assefi said.

Shares of Hewlett Packard Enterprise and Juniper were down about 2% each in late afternoon trade. The proposed acquisition was announced in January 2024.

In a joint statement, Hewlett Packard Enterprise and Juniper Networks said they strongly oppose the DOJ's decision, calling the regulator's analysis "fundamentally flawed." The companies vowed to defend the transaction in court.

"Consistent with the conclusions reached by all other major antitrust regulators who have reviewed the deal, this transaction brings together two complementary networking offerings and will create a networking player with the scope and scale to more effectively compete with global incumbents," the companies wrote.

The Europe Commission and the UK's Competition and Markets Authority both cleared the deal last year.

A modern network built with artificial intelligence will improve customer experience, create more competition and strengthen the backbone of US networking infrastructure, the companies said.