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Mergers and acquisitions are an important element of strategy and innovation

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Mergers and acquisitions are an important element of strategy and innovation. In the PPT on M&A uploaded under "content," I described some of the motivations for companies acquiring others. Please read that PPT first, and then read the latest news that in early 2021, Microsoft announced that it was acquiring a company called Nuance for a whopping $16 billion. Not only is this a large sum of money by itself, it was 23% over and above the current market capitalization of Nuance, indicating that Microsoft was very eager to have Nuance in its stable. Please read about the acquisition, https://www.cnbc.com/2021/04/12/microsoft-buys-nuance-communications-in-16-billion-deal.html.

1. Why was Microsoft so keen too buy Nuance? The article hints that Apple was also interested.
2. Microsoft CEO Satya Nadella highlighted Nuance's health care tools as the key driver behind the acquisition. But Microsoft is not a healthcare company. What is going on?
3. Why could Microsoft not innovate whatever product Nuance had developed inside its own firm? After all, it has a lot of money, and can throw it at R&D?
4. Did Microsoft overpay?