Microsoft to Buy Nuance Communications for $19.7 Billion -- Update
By Aaron Tilley
Microsoft Corp. has agreed to acquire speech-recognition firm
Nuance Communications Inc. for $19.7 billion, adding to a series of
big deals the company has struck to offer an expanded range of
software tools to its customers.
The two companies on Monday said Microsoft agreed to pay $56 per
Nuance share in the all-cash deal, a 23% premium over Friday's
closing price. The deal value includes Nuance debt, the companies
The acquisition is Microsoft's second largest under Chief
Executive Satya Nadella after the company spent about $26 billion
for professional network LinkedIn Corp. in 2016.
Nuance, based in Burlington, Mass., was a pioneer in speech
recognition and artificial intelligence technology. Its software
formed the basis of Apple Inc.'s Siri voice assistant before the
Cupertino, Calif-based company switched to an in-house version.
Nuance has explored a possible sale as far back as 2014, when
Samsung Electronics Co. and private-equity firms were seen as the
most likely buyers.
Voice assistants have enjoyed growing adoption as consumers have
embraced smart devices around their home. Amazon.com Inc. also
helped popularize its Alexa voice assistant through its Echo smart
speaker and Alphabet Inc.'s Google offered equipment with its
version of a virtual helper, called Google Assistant.
Microsoft also has been investing in speech systems for years,
though with less success. Last year, Microsoft said it would shift
its consumer voice assistant offering, called Cortana, away from
trying to compete with Amazon and Google in the consumer market to
focus more on supporting the company's business-focused software
tools. Last month, Microsoft announced it would stop supporting its
Cortana app on smartphones and that the only smart speaker that
supported Cortana removed Microsoft's voice assistant.
Mr. Nadella has a record of deal making since he took over the
company in 2014. He bought the owner of the Minecraft videogame
Mojang AB within months of taking the top job. He followed the
LinkedIn acquisition with the purchase of code-collaboration site
GitHub for $7.5 billion two years later.
Last year, he attempted to acquire parts of popular short video
app TikTok, before talks fell apart. Soon after, Microsoft acquired
videogame maker ZeniMax for $7.5 billion, the maker of the popular
Doom franchise. The company this year has held talks to acquire
messaging platform Discord Inc., The Wall Street Journal reported
Nuance has customers in the healthcare, finance and other
industries, sectors where many companies use Microsoft products.
The two companies in 2019 said they would partner around the use of
artificial-intelligent assistants for doctor visits. The healthcare
product would be built on top of Microsoft's Azure cloud service,
they said at the time.
Microsoft has struck other deals around AI assistants in recent
years. In 2018, Microsoft acquired Semantic Machines, a startup
building conversational artificial intelligence products.
Write to Aaron Tilley at email@example.com
(END) Dow Jones Newswires
April 12, 2021 09:15 ET (13:15 GMT)
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