2019 started with the great news of Google acquiring skyrocketing data analytics startup Looker that has raised more than $280 million. While 2019 is nearing the end, Google again fascinates the world by snapping up the top fitness device maker Fitbit in a $2.1 billion deal.
The bid values Fitbit at $7.35 a share, a premium of about 19% to the stock's closing price on Thursday. The acquisition comes when the fitness tracker brand is focusing its large expansion globally. At the same time, the deal is the door for Google to enter the market for fitness trackers and smartwatches, and to mark the signature in the hardware industry.
"We have created a trusted brand that supports over 28 million active users all over the world who rely on our products to live a healthier, more active life," Fitbit co-founder and chief executive James Park said. "Google is an ideal partner to speed-up our mission," he adds.
Fitball is present in the tech-enabled fitness trackers market for twelve years and has produced several outstanding high-end fitness trackers. According to the Owler estimation, its annual revenue is $1.5 billion. Even though the sale of over 100 million devices, it faced challenges in the market, especially to surpass its competitors. With the acquisition, Fitbit expects to expand its products accessible worldwide.
Fitbit’s shares have jumped 40% on the heels of a report by Reuters as the two parties being in discussion of the acquisition. As both confirmed the deal on Friday, the share is expected to rise even more. The transaction will close in 2020.
However, Fitbit is strong about its privacy and security policy. Fitbit assured that its "health and wellness" data would not be used for Google adverts. The Google-Fitbit collaboration will help the latter to bring a tough competition with its main rival Apple. Google's wearable operating system Wear OS will strengthen the potential of the trackers.
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