Microsoft to Acquire Nuance Communications for $16B

Sandra Radlovački

The acquisition will combine solutions and expertise to deliver new cloud and AI capabilities across healthcare and other industries

Microsoft to Acquire Nuance Communications for $16B

Microsoft announced Monday it will acquire AI and speech technology firm Nuance Communications for about $16B in cash, in aim to build its cloud strategy for healthcare.

The deal comes as a result of a previous collaboration of both companies in 2019, when they partnered to automate clinical administrative work such as documentation. Both will gain from a boom in telehealth services with medical consultations shifting online due to the Covid-19 pandemic.

Microsoft’s CEO, Satya Nadella said:

“Nuance provides the AI layer at the healthcare point of delivery. AI is technology’s most important priority, and healthcare is its most urgent application.”

Microsoft’s offer of $56 per share represents a premium of 22.86% to Nuance’s last close. Shares of Nuance rose nearly 23% in pre-market trading.

Earlier, Nuance helped launch Apple’s assistant Siri and makes software businesses such as the automotive sector.

Mark Benjamin will remain as the chief executive officer of Nuance and will report to Scott Guthrie, executive VP of Cloud & AI at Microsoft, the company announced.

A deal for Nuance would be Microsoft’s second biggest after its $26.2B acquisition of Linkedin 2016. With net debt included, the all-cash transaction is valued at $19.7B.

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