Microsoft takes advantage of antitrust spotlight on rivals to go hunting for large acquisitions

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CEO of Microsoft Satya Nadella gives a lecture astir dream, conflict and instauration astatine Tsinghua University connected September 25, 2014 successful Beijing, China. Nadella visited China for the archetypal clip connected Thursday.

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Twenty years ago, the United States government filed suit against Microsoft for abusing its marketplace power. Today, Microsoft is empire gathering due to the fact that the country's regulatory absorption is connected its biggest rivals.

Microsoft announced Monday it had acquired Nuance Communications for $16 cardinal ($19.7 cardinal including nett debt). The woody gives Microsoft a institution that specializes successful dependable transcription and related artificial quality software. Nuance has a peculiar niche successful wellness care, providing bundle to digitize conversations from doctor's visits and facilitate objective documentation.

The acquisition comes astir a period aft Microsoft closed its $7.6 cardinal woody for ZeniMax, the genitor institution of video crippled steadfast Bethesda. That transaction is meant to boost Microsoft's Xbox against increasing video gaming competition. Microsoft has also been successful talks to get Discord, a voice, substance and video-chatting level for games, for much than $10 billion. Those discussions person happened concurrently to the Nuance transaction discussions, which started successful December, according to a idiosyncratic acquainted with the matter.

Microsoft's caller woody talks don't halt there. The institution nearly acquired TikTok's U.S., Canadian, Australian and New Zealand operations past twelvemonth in a woody that was being discussed successful the $20 cardinal to $30 cardinal range. Microsoft has besides recently approached Pinterest to gauge their involvement successful selling, according to a Financial Times study successful February. Pinterest has a marketplace capitalization of much than $51 billion.

Less than 3 years ago, Microsoft paid $7.5 cardinal for GitHub. Less than 5 years ago, Microsoft paid more than $26 billion for LinkedIn.

Spending tens of billions connected acquisitions is starkly antithetic from the strategies of the world's different exertion ace giants -- Apple, Amazon, Google and Facebook. It also just truthful happens that Congressional Democrats and authorities agencies including the DoJ and FTC have taken a adjacent look astatine whether Apple, Amazon, Google and Facebook person abused their marketplace power, and are considering separating their businesses oregon unraveling erstwhile ample acquisitions.

Other than Microsoft, Amazon is the lone subordinate of the large 5 that has spent much than $5 cardinal connected an acquisition successful the past 5 years, buying market foods concatenation Whole Foods for much than $13 cardinal successful 2017.

Nuance is Microsoft's 4th specified takeover.

Not 'some aggregation play'

Apple, Amazon, Google and Facebook, good alert they're nether regulatory fire, are each proceeding cautiously with larger acquisitions, according to radical acquainted with the matter. A large acquisition for immoderate of them would astir surely gully governmental attention, particularly arsenic their marketplace capitalizations person ballooned during the pandemic. It's imaginable a large M&A transaction would go the catalyst for much draconian actions, specified arsenic a institution breakup oregon forced divestitures.

But Microsoft has avoided the aforesaid level of scrutiny. That eliminates bidding wars and makes Microsoft the existent purchaser of prime -- a relation it apt wouldn't person played 5 years ago.

This dynamic popped up during past year's TikTok discussions, erstwhile Google felt it couldn't pb a woody for the U.S. assets due to the fact that of its regulatory positioning.

CEO Satya Nadella alluded to wherefore helium thinks the authorities has treated Microsoft -- a institution with a $1.9 trillion marketplace valuation -- otherwise in an interrogation with CNBC.

"Our occupation is to supply exertion truthful that [doctors and providers] tin support each of the information secure," Nadella said, speaking specifically astir Nuance.

"This is not astir immoderate aggregation play. This is astir axenic level providers. That makes Microsoft precise chiseled successful however we attack astir of what we do."

In different words, Nadella is making the statement that Microsoft is agnostically providing exertion portion competitors are utilizing user information successful perchance harmful oregon monopolistic ways.

Microsoft shareholders volition yet person to determine however overmuch empire gathering they're comfy with. Nadella has turned the institution astir with his absorption connected endeavor technology. Nuance fits the focus. Other targets are further afield. But, arsenic Wedbush expert Dan Ives wrote successful a enactment to clients, "clearly, Redmond is connected the 'offensive' astir M&A with the institution successful a wide presumption of strength."

So far, shareholders are not showing immoderate trepidation astir the Nuance deal, sending Microsoft shares up astir 0.5% successful day trading Monday.

WATCH: Microsoft, Nuance CEOs connected $16 cardinal deal, unreality strategy, health-care AI solutions

Less than 3 years aft Microsoft acquired GitHub for $7.5 billion. Less than 5 years ago, Microsoft bought LinkedIn for $26.2 billion.

None of the different exertion giants -- Amazon, Google, Apple oregon Facebook -- person spent anyplace close

on the aspects of regulation. these are superi important tipioocs.

one ofthe things we are doing -- al labout providers patiets doctors -- their data. supply tech truthful they tin successful information support information unafraid -- usage evenAI to payment wellness care. not an aggretaion play -- axenic level providers. microsoft chiseled successful however we attack astir of what we do.