Rumours that the search engine giant was considering buying out the San Francisco-based fitness devices company began swirling in September, with Reuters reporting earlier this week that Alphabet, Google’s parent company, had made an offer.
Google will be buying Fitbit for $2.1 billion, the two companies said in press statements on Friday.
“We have built a trusted brand that supports more than 28 million active users around the globe who rely on our products to live a healthier, more active life,” company cofounder and CEO James Park said in a statement. “Google is an ideal partner to advance our mission,” he added.
The businessman added that “with Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category.”
Fitbit confirmed Friday that Google had offered it $7.34 per share, close to 20 percent above the company’s closing price on the stock market on Thursday. The company had already enjoyed an over 40 percent rise in share price following reports that Google had made an offer to buy it.
Rick Osterloh, the head of Google’s devices and services division, said the deal would give the tech giant an “opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.”
The sale is expected to be completed next year, and will require approval by shareholders, and from regulators.
According to Engadget, Google has committed not to selling Fitbit’s data to third parties for advertising purposes, although it may still use it for the search engine giant’s own targeted ad business.
Fitbit and other fitness wearables and apps made international news last year after fitness trackers accidentally revealed the locations of US military bases abroad, including in conflict zones such as Iraq and Syria, prompting the Pentagon to restrict the use of fitness trackers for military personnel on base. Other countries have since followed suit.
The company was also criticised in 2011 for making users’ activities while wearing the devices available for public viewing by default, leading to privacy concerns.
Along with Apple’s pricey Watch, other companies, including China’s Huawei and Xiaomi have entered the market of fitness wearables in recent years, cutting into Fitbit’s market advantage. The company revised revenue projections downward in July owing to flabby sales, and is expected to issue a report on its third-quarter revenues next week.
Source: News Agencies