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UK antitrust regulator to probe Microsoft's Nuance takeover

The CMA says it will assess whether the merger is worthy of a full investigation

Microsoft's $19.7 billion acquisition of speech-to-text specialist Nuance is to be scrutinised by the UK's Competition and Markets Authority (CMA). 

The antitrust regulator said on Monday that it will take an initial look into the deal to assess whether a full investigation is needed. 

A consultation period is now open, with the CMA inviting interested parties to comment on the matter. The consultation runs until 10 January 2022 and will likely lead to a delay in the transaction or, potentially, a complete cancellation. 

The CMA will consider whether the proposed transaction will affect the wider market and, if so, whether it will substantially lessen competition within the UK. The regulator will look to invoke the Enterprise Act 2002 if they deem it worthy of investigation. 

Nuance is a US firm based just outside of Boston so any investigation by the UK's CMA will be on the grounds of public interest.

Crucially, the UK government is able to intervene on special public interest grounds in any transaction that meets all the requirements for a "relevant merger situation".

According to UK law, there are two situations where this arises: if two or more enterprises cease to be distinct, or will cease to be distinct, as a result of being brought under common ownership or control. 

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A deal for Nuance was announced in April and the cost of the transaction is potentially Microsoft's biggest since it brought LinkedIn. The company is a specialist in artificial intelligence, particularly with audio recognition and transcription tools.

At the time, it was suggested that Microsoft would use the deal as a way of expanding into the markets Nuance has a presence in, such as healthcare. 

The healthcare market has been a prime investment area for the tech giants over the last few years, with the likes of Apple, Amazon, Google and even Facebook all showing interest in building tools to support health. 

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