When Microsoft announced its intent to buy Nuance Communications last year for $20 billion, it marked a hard move into healthcare for the company. But the deal was not a slam dunk by any means in an increasingly tight regulatory environment. After finally clearing all the regulatory hurdles, however, the company announced today that the deal has closed.
In a video statement CEO Satya Nadella called Nuance a pioneer in enterprise AI, and said that he is looking forward to seeing what the two companies can accomplish together. “Together we will usher in a future of outcome-based AI where healthcare professionals can spend more time with patients and less time on documentation. Together we will help move key industry workflows securely to the cloud. And together we will use the power of AI to help organizations across every industry create frictionless, personalized customer experiences,” he said.
Nadella’s statement strongly hinted that the company intends to use the Nuance technology more broadly than its primary healthcare focus, taking advantage of Microsoft’s vast resources to build on the existing solutions and bring them to other verticals like financial services, retail and telecommunications. Time will tell how that all comes together.
It wasn’t always a given that we would get to today’s announcement with a combined Microsoft-Nuance. While the prevailing industry wisdom was that Microsoft was not going to be dominating any markets with this deal, in a regulatory environment in which governments have been looking more closely at the largest tech companies, and more specifically mega deals that could have a negative impact on competition, it wasn’t always clear it would happen.
After the deal was cleared by the U.S. Justice Department last year, and later with the EU, one last hurdle remained while the company awaited approval from the British Competition and Markets Authority (CMA).
This week the CMA also approved the deal, clearing the way for today’s announcement. The CMA said in a statement that it found no evidence that when combined that the two companies would have an adverse impact on competition in the healthcare transcription market where Nuance has primarily operated:
“The Competition and Markets Authority (CMA) has found that the anticipated acquisition by Microsoft Corporation (Microsoft) of Nuance Communications, Inc. (Nuance) does not give rise to a realistic prospect of a substantial lessening of Competition,” the watchdog group wrote in a summary of its findings.
With that out of the way, Microsoft and Nuance will move forward with one of the biggest acquisitions in the Nadella era, second only to the $26 billion LinkedIn deal in 2016. It’s worth noting that the company has a $69 billion deal pending to acquire Activision/Blizzard it announced in January, but that deal is still working its way through the approval process.