Google has announced that it’s buying wearable company Fitbit for $2.1 billion. According to Rick Osterloh, Google SVP of devices and services, this purchase is an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.
The news comes just days after a report from Reuters, which claimed that Google was in talks to buy the popular fitness tracker company.
Google has spent years trying to break into the wearables market with its Wear OS platform, but it’s struggled to make a real impact.
Fitbit’s hardware chops have always been great, giving Google a much stronger foundation to build on for future Android-integrated wearables devices. Google’s software skills and wide developer support could help Fitbit’s smartwatches like the Versa get a little smarter, alongside the deeper software integration with Android that a closer relationship could offer.
The Fitbit purchase isn’t the only recent investment Google’s made into fitness-focused wearables, either: back in January, the company spent $40 million to buy some unknown smartwatch technology from Fossil based on tech that Fossil acquired when it bought wearable maker Misfit back in 2015.
Google, which has been defending its privacy practices after a number of regulatory probes, said it would be transparent about the data it collects for its devices and would not sell that data. Fitbit brings to the deal partnerships it has struck with some large drug companies. In October, Fitbit announced a collaboration with Bristol-Myers Co and Pfizer Inc on early detection of irregular heartbeat, or atrial fibrillation, on its devices.
Fitbit in August also launched its latest smart watch, Versa 2, adding Amazon.com Inc's voice assistant Alexa, online payments and music storage to the device's capabilities. Fitbit has been offered $7.35 per share in cash, the company said, a premium of about 19% to the stock's closing price on Thursday. The company's shares were trading up 15% at $7.11. Shares of Alphabet were nearly flat at $1,263.18.
The company's shares have gained more than 40% since Reuters reported on Monday that Google had made an offer for Fitbit. Qatalyst Partners LLP was financial adviser to Fitbit on the deal, which is expected to close in 2020. Fenwick & West LLP was the legal adviser.