Google to acquire Fitbit for $2.1 billion

In a bid to fight the direct competition with global tech giant Apple in the fitness tracking space. The deal values Fitbit around $2.1 billion at a fully diluted equity value. As per the report, in 2018 Apple owned about half of the global smartwatch market in terms of units shipped.

Google parent company Alphabet is buying Fitbit and this acquisition pits Alphabet against fellow tech giant Apple in the wearable fitness tracking space. In a release Fitbit says Google is paying $7.35 per share in cash for the company, valuing it at about $2.1 billion.

Fitbit’s stock surged 16%, while shares of Alphabet were up about 0.8%. Fitbit said. Fitbit’s all time high share price was $51.90 on Aug. 5, 2015, a couple months after its stock market debut at $30.40. The deal is expected to close in 2020, according to the announcement.

Following the announcement, Google’s hardware chief Rick Osterloh released a blog post explaining how the acquisition can help Google advance its ambitions for Wear OS, its software for smartwatches.

“By working closely with Fitbit’s team of experts, and bringing together the best AI, software and hardware, we can help spur innovation in wearables and build products to benefit even more people around the world,” Osterloh said. “Google also remains committed to Wear OS and our ecosystem partners, and we plan to work closely with Fitbit to combine the best of our respective smartwatch and fitness tracker platforms.”

Google currently licenses its Wear operating system to companies such as Fossil but does not make its own smartwatch. Google will not use health and wellness data from Fitbit for its ads, according to the announcement.

The move comes after Google announced a deal to buy $40 million worth of Fossil’s smartwatch technology in January. Fossil was already one of the primary brands building smartwatches on Google’s Wear OS.