The US government has approved Microsoft’s deal to purchase artificial intelligence and speech recognition company Nuance Communications, according to a public filing.

The $16 billion (£11.3bn) deal, announced in April, is Microsoft’s second-largest acquisition to date, following the purchase of LinkedIn in 2016 for £18bn.

In 2019 the two companies formed a partnership around the automation of healthcare administrative work, such as documentation, using speech-recognition.

Nuance said in a filing with the Securities and Exchange Commission late on Friday that the deadline for US government regulators to object had expired on 1 June.

Regulatory approval

The end of the waiting period “satisfies one of the conditions to the closing of the merger”, Nuance said in the filing.

Under US law mergers must undergo a waiting period to allow the Federal Trade Commission and the Antitrust Division of the US Department of Justice to object.

Microsoft said in a statement that the deal must pass regulatory reviews in other jurisdictions and is planned to close by the end of 2021.

Nuance Communications was founded in 1992 and is known for having helped develop Apple’s Siri.

It has built up a strong presence in the health industry, with its software used by 77 percent of US hospitals.

Clinical tools

The company makes a number of popular clinical speech-recognition tools used by physicians and radiologists to automate the process of generating clinical documentation.

In the US, more than half of physicians and 75 percent of radiologists use the tools.

Nuance’s Healthcare Cloud revenue saw 37 percent growth year-on-year for its most recent fiscal year, ended September 2020.

Microsoft has focused aggressively on building out its cloud business in recent years, including a focus on industry-specific cloud tools.

As part of that drive the company formed a deal with Nuance in 2019 that links Nuance’s tools to Microsoft Cloud for Healthcare.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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