The British competition regulator has launched a preliminary investigation into Microsoft’s second largest takeover as it steps up scrutiny of the world’s leading technology companies.
Microsoft’s planned $19.7 billion acquisition of Nuance Communications, an artificial intelligence company that helped launch Apple’s Siri voice assistant, will be examined by the Competition and Markets Authority (CMA).
Nuance, which developed tools that help with transcription of speech, has capitalised on surging demand in healthcare industries for such services over the past year.
Microsoft first announced plans to buy the business, which is based in Burlington, Massachusetts, in April.
Shares in Microsoft slipped 0.28 per cent to $341.42 in early afternoon trading in New York. Shares in Nuance also traded lower, easing down by 0.4 per cent to $55.05. Neither immediately responded to requests for comment.
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It is the latest example of the robust approach to tech giants adopted by the watchdog, which last month ordered Meta, the owner of Facebook, to unwind its takeover of Giphy, the animated images platform, citing concern over the potential risks for British social media users and advertisers.
Microsoft was founded in 1975 by Bill Gates with Paul Allen, who died in 2018. It is based in Redmond, Washington state. Listed in 1986, it is one of the world’s most valuable public companies with a market capitalisation of $2.6 trillion. Gates left the board last year.
Its proposed offer for Nuance is second only to Microsoft’s $26.2 billion takeover of LinkedIn, the social network for professionals, in 2016. The Nuance deal amounts to about $16 billion in cash but is valued at $19.7 billion when net debt is included.
In a brief filing published on Monday, the CMA invited any interested parties to comment on the planned deal and set a deadline in early January for submissions. Officials are considering whether Microsoft’s acquisition of Nuance would result in a “substantial lessening of competition within any market or markets in the United Kingdom for goods or service,” the regulator explained.
Once it has examined the contributions from interested parties, the CMA will formally launch a phase 1 investigation into the transaction in the new year.
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The European Commission is set to issue a ruling on the deal on December 21. Last week Reuters reported that it was set to grant unconditional antitrust approval.
