Just days after reports surfaced the internet that Google is close to buying Fitbit, Google and Fitbit have now confirmed the purchase.
Fitbit in its press release today announced that it has agreed into an agreement to be acquired by Google LLC. Google’s parent company, Alphabet has agreed to pay Fitbit $ 7.35 per share in cash, thus, paying the fitness bracelet manufacturer a total of approximately $ 2.1 billion.
Acquiring Fitbit can help Google strengthen its position in the wearables space, an area where it has struggled despite many efforts around smartwatches and Wear OS. This could be a great step in expanding Google services with the help of the Wearable giant.
With this acquisition, Google has now brought the Wearable pioneer in the house. This is not the first time Alphabet has stepped into a wearable brand. Earlier in January 2019, it bought the intellectual property related to Fossil’s Smartwatch technology for $ 40 million.
However, deal with Fitbit appears to be one of Google’s major investments. Google’s senior vice president of devices and services, Rick Osterloh, praised Fitbit and gave an insight about what could be the possible motive of the deal. “By working closely with the Fitbit team of experts and bringing together the best of artificial intelligence, software and hardware, we can drive innovation in wearables,” he said.
In 2015, Google introduced Wear OS, an operating system designed for smartwatches and other wearables. Developed as a strategic move to help Google bring Android into these products similar to how WatchOS has helped Apple expand iOS. However, the idea did not do well and came across a failure.
This move will help Google boost its Wear OS. Osterloh mentioned in a blog post that Google sees an opportunity to invest more in the Wear OS and also introduce Made by Google wearable devices into the market.
Google can also benefit in its hardware space with Fitbit’s well-liked hardware which has a distinctive look and styling. Fitbit has the leverage of rolling in the market with control of both its hardware and software for its gadgets, something which Google lacks.
Fitbit would also be considering the deal a sigh of relief. After the market fluctuation and fumbling of its recent launches, the company was in a bad shape. While Fitbit has been a favourite but recently was crushed by competitors. Brands such as Apple and Xiaomi are giving Fitbit a tough time.
Thus, the deal could turn out to be a good match for both parties.
Fitbit has always prioritized consumer trust. And thus, even after the acquisition, Fitbit will be at par in maintaining consumer privacy and security. It will allow users to control their data. The data collected will be transparent to its users. Users will have options to view, take away or delete the data from the app. No exchange of personal data will take place in any circumstances and the Fitbit health and wellness data will not be used for Google advertising.
In a press release, Fitbit states that the acquisition is expected to close in 2020 post the approval by both Fitbit shareholders and regulators. Qatalyst Partners LLP and Fenwick & West LLP acted as the respective financial and legal advisors to Fitbit.