Google aquire the Fitbit activity tracker business in a $2.1bn deal that will enable Google to take on Apple in the fast-growing smartwatch business.Google is paying for the San Francisco-based Fitbit, which was set up in 2007.
It is paying $7.35 per share a premium of more than 70% to the Fitbit share price before the shares were suspended earlier this week amid takeover speculation.
The shares were initially priced at $20,and soared to more than $50 in the weeks following the initial public offer.But it has suffered in recent years from competition from bigger rivals Apple,China’s Xiaomi and Samsung.In August the group’s shares hit a low of $2.85.
The deal is Google’s biggest consumer purchase since it bought home-tech business Nest five years ago for $3bn, will have to be approved by shareholders and regulators,especially over how it handles Fitbit users’ data.The firm claims to have 28m active users worldwide and its fitness trackers store location and physical health data for users who monitor their activity, sleep and and exercise using a range of wearable devices.
Google has offered its own fitness tracking service since 2014, but with third parties support such as Tag Heuer and Fossil to produce Android-compatible smartwatches.
The market for wearables is growing rapidly. According to latest quarterly financial results, Apple reported annual sales growth of more than 50% in its “Wearables” division, which includes watches. The iPhone-maker’s total sales from wearables over the three month period were £6.5bn.
The deal will expand Google’s range of consumer products,which already includes Headphones,Smart Speakers,Smartphones and Laptops.