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Nasdaq MSFT MicroSoft

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Microsoft Wins EU Antitrust Approval for $16B Nuance Deal

4 years 10 months ago

Microsoft Corporation (NASDAQ: MSFT) has been in the news for its $16 billion takeover bid of Nuance Communications (NASDAQ:NUAN). According to Reuters, the European Commission gave an unconditional antitrust approval for the deal, spotting the absence of any anti-competitive fears.

Microsoft is a technology behemoth producing both hardware and software solutions for the sector. Meanwhile, Nuance is an artificial intelligence (AI) and speech technology company and serves about 77% of U.S. hospitals.

Following the news, MSFT shares jumped 2.3% to close at $327.29, while NUAN ended the day flat at $55.20 on December 21.

EU Antitrust Approval

Winning the EU Antitrust approval is a big step for Microsoft as it can go ahead with its proposed acquisition. In November, the European Commission initiated consumer and competitor reactions to address any anti-competitive concerns.

The Commission said that the investigation found no threat to competition in the markets for transcription software, cloud services, enterprise communication services, PC operating systems, and other products.

The Commission also stated that both companies offered very different products, and that there was no overlap between MSFT and Nuance’s transcription software services.

The company has already sought approval from regulators in U.S. and Australia. The acquisition is the second costliest deal for Microsoft, the highest one being the LinkedIn acquisition, worth $26.2 billion in 2016.

Commenting on the occasion, the Commission said, “The proposed transaction would raise no competition concerns on any of the markets examined in the European Economic Area.”

Wall Street View

Yesterday, SMBC Nikko analyst Steven Koenig initiated coverage of the MSFT stock with a Buy rating and a price target of $410, which implies 25.3% upside potential to current levels.

According to Koenig, Microsoft is well-positioned to capitalize on the digital transformation trends. He also stated that the company's best-in-class product offerings, leading market positioning, as well as solution selling capabilities give it a major advantage over its peers.

Wall Street’s Top Research Firms have given the stock a Strong Buy consensus rating based on 24 Buys and 1 Hold. The average Microsoft price target of $370.23 implies 13.1% upside potential to current levels.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into MSFT’s performance.

In November, Microsoft website traffic recorded a 4.16% year-over-year decline in monthly visits. However, year-to-date website traffic growth increased by 15.20% compared to the same period last year.

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