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Microsoft buys Nuance Communications in a $16 billion deal 

Microsoft CEO Satya Nadella appears on throughout a panel session on day three of the World Financial Discussion board in Davos, Switzerland, on Jan. 24, 2019.

Jason Alden | Bloomberg | Getty Photographs

Microsoft introduced Monday that it should purchase speech recognition firm Nuance Communications for $56 per share, about 23% above its closing value Friday. The deal is value about $16 billion.

It is the newest signal Microsoft is trying to find extra progress by acquisitions. The corporate can be reportedly in talks to purchase the chat app Discord for about $10 billion. On prime of that, Microsoft made an effort to purchase TikTok’s U.S. enterprise final yr for about $30 billion earlier than the deal was derailed.

The Nuance acquisition represents Microsoft’s largest acquisition because it purchased LinkedIn for greater than $26 billion in 2016. Final month, Microsoft accomplished its $7.6 billion acquisition of gaming firm Zenimax. Shares of Nuance had been up almost 23% in premarket buying and selling Monday, representing roughly the identical premium Microsoft plans to pay primarily based on the closing value Friday. Buying and selling was halted on the inventory after that pop and are anticipated to renew buying and selling round 9 a.m. ET. Microsoft shares had been barely adverse.

Nuance can be aligned with the a part of Microsoft’s enterprise that serves companies and governments. Nuance derives income by promoting instruments for recognizing and transcribing speech in physician’s visits, customer-service calls and voicemails. In its announcement Monday, Microsoft stated Nuance’s expertise can be used to enhance Microsoft’s cloud merchandise for well being care, which had been launched final yr.

The corporate reported $7 million in web revenue on about $346 million in income in the fourth quarter of 2020, with income declining 4% on an annualized foundation. Nuance was based in 1992, and had 7,100 workers as of September 2020.

Microsoft stated Nuance’s CEO Mark Benjamin will stay on the firm and report back to Scott Guthrie, the Microsoft government answerable for the corporate’s cloud and synthetic intelligence companies.

Nuance has a robust repute for its voice recognition expertise, and it has been thought of an acquisition goal for firms like Apple, Microsoft and extra for a number of years. Microsoft has voice recognition constructed into lots of its merchandise already, nevertheless it has not too long ago shut down some merchandise that includes its voice assistant Cortana.

This story is creating.

–CNBC’s Alex Sherman and Jordan Novet contributed to this report.

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