Acquisition: Microsoft to pay $19.7 billion for Nuance

Microsoft is about to make the second largest acquisition in the company’s history. The group wants to acquire Nuance, an expert in speech recognition and artificial intelligence.

Second largest acquisition by Microsoft

With the acquisition of Nuance, this is the second largest acquisition of the group in its corporate history, only the acquisition of LinkedIn cost Microsoft more. The Redmond-based company shelled out around $24 billion for the social network in 2016. The last takeover by Microsoft was that of ZeniMax with Bethesda. Here, the company paid around 7.5 billion US dollars for the brands.

The price for the takeover of the expert for speech recognition and artificial intelligence has already been negotiated. Thus, 56 US dollars per share is to be paid. Accordingly, the total volume of the agreement would amount to 16 billion US dollars. Plus a premium of about 23 percent on the share price as of the last trading day in the NASDAQ. The total investment by Microsoft thus amounts to 19.7 billion US dollars for Nuance, which is to be transferred in cash. Microsoft was supported in the agreement with Nuance by the renowned money house and financial services provider Goldman Sachs & Co.

Collaborate and complement

The second largest acquisition will then create new synergies and the two companies’ divisions can complement each other accordingly. Especially since the group has been working with Nuance Communications in the areas of speech recognition and conversational AI through “deep learning” for quite some time, the acquisition of Nuance makes sense. There is also the growth market of medical speech recognition. Here, Nuance is a leader with “Dragon Medical One.” In addition, the company offers current references with Dragon Professional Individual and Dragon Home. By contributing Microsoft Azure AI and Microsoft Azure, synergies are bundled. Both companies are already driving Ambient Clinical Intelligence (ACI) to write clinical documentation in hospitals and doctors’ offices by itself in the future. With the acquisition of Nuance, Microsoft aims to sustainably strengthen its AI solutions and cloud business.