Microsoft announced Monday that it will buy Nuance Communications, a speech recognition company, for $56 per share, about 23% above its closing price Friday.
The deal is reportedly worth nearly $16 billion. Microsoft is also in talks to buy Discord, a popular chatting app, for about $10 billion. Additionally, Microsoft also made an effort to buy TikTok’s U.S. business last year for about $30 billion prior to the deal falling through.
Microsoft’s acquisition of Nuance would be Microsoft’s largest acquisition since the company bought LinkedIn for more than $26 billion in 2016. Shares of Nuance were up almost 23% in its premarket trading Monday, representing approximately the same price Microsoft plans to pay based on the closing price Friday. Trading was halted on the stock after that increase and are expected to resume around 9 a.m. While trading was halted, Microsoft shares were slightly negative.
Nuance would be integrated with the side of Microsoft that serves business and governments. Nuance gained revenue by selling tools for recognizing and transcribing speech in doctor’s visits, customer-service phone calls and voicemails. In its announcement Monday, Microsoft said Nuance’s technology will be used to optimize Microsoft’s cloud products for health care, which were launched last year.
Microsoft reported $7 million in net income on about $346 million in revenue during the final quarter of 2020, with revenue declining 4% annually. Nuance was founded in 1992, and had 7,100 employees in September 2020.
Microsoft said Nuance’s CEO Mark Benjamin will continue working at the company and report to Scott Guthrie, the Microsoft executive leading the company’s cloud and artificial intelligence businesses.
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