USA –Oracle has received all the necessary regulatory approvals for its US$28.3 billion acquisition of the healthcare IT company, Cerner, and the deal is now expected to close on June 6.

Oracle said it obtained the required antitrust approvals for the deal, including European Commission clearance.

The all-cash deal values Cerner at US$95 a share. The transaction, announced in December, is Oracle’s largest acquisition ever and one of the largest takeovers this year.

With this deal, database giant Oracle is pushing deeper into the healthcare market, and the acquisition should help the company scale up its cloud business.

Oracle is known for its massive database technology, and acquiring Cerner expands the company’s reach to major health systems and presents potentially lucrative cross-selling opportunities.

Healthcare is a US$3.8 trillion market in the US alone, and the company plans to expand Cerner’s business into more international markets.

“We expect Cerner to be a huge growth engine for years to come,” said Safra Catz, Oracle’s CEO, in a statement.

For Cerner, a 43-year-old company, Oracle’s tech muscle will help boost its services and capabilities for providers.

Joining Oracle as a dedicated industry business unit provides an unprecedented opportunity to accelerate our work modernizing electronic health records, improving the caregiver experience, and enabling more connected, high-quality and efficient patient care,” said David Feinberg, Cerner’s CEO and president.

Cerner and Oracle executives specifically highlighted the potential to leverage voice and natural language processing technology with Cerner’s software.

Cerner’s largest business and most important clinical system already runs on the Oracle database, noted Mike Sicilia, executive vice president, industries at Oracle.

Working together, Cerner and Oracle have the capability to transform healthcare delivery by providing medical professionals with a new generation of healthcare information systems.

Trends in the Healthcare IT market

The Cerner acquisition, whose price tag has remained unchanged since it was first announced in December 2021 is a big deal.

It’s three times as pricey as the company’s next biggest purchase, a then-landmark acquisition of PeopleSoft for US$10.3 billion in 2005.

Indeed, it’s one of the biggest software mergers and acquisitions ever – just slightly smaller than IBM’s US$34 billion acquisition of Red Hat in 2018 and bigger than Microsoft’s US$16 billion Nuance buy this year.

There is a platform war playing out, and big tech players are making significant investments.

A decade ago, the tech giants made some early, unsuccessful plays into healthcare, such as Microsoft’s attempt at personal health records with HealthVault.

But the past few years have seen big software and tech giants make a concerted push into healthcare with megadeals like two private equity firms picking up Cerner competitor Athenahealth in a US$17 billion deal.

Oracle’s acquisition of Cerner may be a play to get a strong foothold in the emerging cloud opportunity in healthcare

Clearly, the computing giant is bullish on what the addition of Cerner, with its own cloud infrastructure and troves of health data, can do for its business.

Oracle has its work cut out for it as it learns the ropes of a complex and competitive healthcare market, but in the near term it looks confident about what it can do with such a significant addition to its technology portfolio.

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