(Reuters) -Microsoft Corp said on Monday it would buy artificial intelligence and speech technology firm Nuance Communications Inc in a $19.7 billion deal including net debt, as it seeks to bolster its cloud strategy for healthcare.
The deal comes as both companies, which partnered in 2019 to automate clinical administrative work such as documentation, gain from a boom in telehealth services as medical consultations shifted online due to the COVID-19 pandemic. (bit.ly/2PMuCJr)
“Nuance provides the AI layer at the healthcare point of delivery,” Microsoft CEO Satya Nadella said in a statement, adding “AI is technology’s most important priority, and healthcare is its most urgent application.”
Microsoft’s offer of $56 per share represents a premium of 22.86% to Nuance’s last close. Shares of Nuance rose nearly 23% in pre-market trading.
Nuance helped launch Apple Inc’s assistant Siri and also makes software for businesses including automotive.
Mark Benjamin will remain the chief executive officer of Nuance and will report to Scott Guthrie, executive vice president of Cloud & AI at Microsoft, the company said. (refini.tv/3a5Ux5z)
Reporting by Chavi Mehta in Bengaluru; Editing by Aditya Soni and Sriraj Kalluvila