Microsoft has announced the purchase of the Nuance Communications group, which specializes in artificial intelligence, for $ 56 per share, about 23% above Friday’s closing price. The deal is worth about $ 16 billion. The news of the negotiations had been given in the past by the US media. This is Microsoft’s largest acquisition after LinkedIn in 2016 for $ 27 billion. In the premarket, Microsoft’s stock is up 0.2%, Nuance’s is over 20%.
The transaction reflects Microsoft’s willingness to grow its customer base, considering also that last month it completed the acquisition of the gaming company Zenimax for 7.6 billion dollars and that it would be in exclusive negotiations for the purchase of Discord, a messaging app used by gamers, for over 10 billion dollars. Last year, Microsoft attempted to acquire TikTok’s US business for about $ 30 billion, but the negotiations broke down.
Nuance specializes in speech recognition: its software created the basis for the voice assistant Siri, before Apple later decided to develop it independently, recalls the Wall Street Journal. Nuance has numerous customers in the healthcare and finance industries, where Microsoft products are popular. The company’s software is for example used for transcribing conversations during medical examinations and telephone calls from customer service operators. Announcing the deal, Microsoft explained that Nuance’s technology will be used to enhance Microsoft Cloud’s healthcare products, launched last year.
Nuance, founded in 1992, reported net income of 7 million, on revenues of approximately 346 million, in the fourth quarter of 2020, and has approximately 7,100 employees. Nuance CEO Mark Benjamin will remain at the head of the company and will report directly to Scott Guthrie, head of Microsoft’s cloud and artificial intelligence division.