Microsoft is buying speech recognition company Nuance in a deal worth about 16 billion US dollars (£11.6 billion).

It will pay 56.00 dollars (£36.31) per share cash, a 23% premium on Nuance’s Friday closing price.

The companies value the transaction at 19.7 billion dollars (£14.3 billion), including debt.

Shares of Nuance surged about 23% in Monday pre-market trading.

Microsoft’s acquisition of Nuance comes after the companies formed a partnership in 2019.

The Redmond, Washington, company said the deal will double its total addressable market in the healthcare provider industry, bringing its total addressable market in healthcare to nearly 500 billion dollars (£363 billion).

The transaction is Microsoft’s second largest deal following its 26 billion dollar (£18.9 billion) purchase of LinkedIn in 2016.

Last September, it bought video game maker ZeniMax for 7.5 billion dollars (£5.4 billion).

Mark Benjamin will continue as Nuance chief executive.

The transaction is expected to close this year.

It still needs approval from Nuance shareholders.