NEW YORK: Alphabet, parent company of Google, announced Friday that the tech giant has entered into a definitive agreement to acquire leading wearables brand Fitbit.
The deal, which values Fitbit around $2.1 billion at a fully diluted equity value, puts Google in direct competition with Apple in the fitness tracking space.
Following the announcement, Fitbit’s stock surged 16%, while shares of Alphabet were up about 0.8%, CNBC reported.
Google senior vice president of Devices & Services, Rick Osterloh released an official blog post explaining how the acquisition can help Google advance its ambitions for Wear OS, its software for smartwatches.
The acquisition, which is expected to close in 2020, comes in the wake of Google announcing a $40 million deal to buy Fossil’s smartwatch technology in January. Fossil was already making smartwatches on Google’s Wear OS.
Osterloh's blog post in full:
"Today (Friday), we’re announcing that Google has entered into a definitive agreement to acquire Fitbit, a leading wearables brand.
"We believe technology is at its best when it can fade into the background, assisting you throughout your day whenever you need it. Wearable devices, like smartwatches and fitness trackers, do just that—you can easily see where your next meeting is with just a glance of an eye or monitor your daily activity right from your wrist.
"Over the years, Google has made progress with partners in this space with Wear OS and Google Fit, but we see an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market. Fitbit has been a true pioneer in the industry and has created engaging products, experiences and a vibrant community of users. 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.
"Google aspires to create tools that help people enhance their knowledge, success, health and happiness. This goal is closely aligned with Fitbit’s long-time focus on wellness and helping people live healthier, more active lives. But to get this right, privacy and security are paramount. When you use our products, you’re trusting Google with your information. We understand this is a big responsibility and we work hard to protect your information, put you in control and give you transparency about your data. Similar to our other products, with wearables, we will be transparent about the data we collect and why. We will never sell personal information to anyone. Fitbit health and wellness data will not be used for Google ads. And we will give Fitbit users the choice to review, move, or delete their data.
"Three and a half years ago, I joined Google to create compelling consumer devices and services for people around the world. Our hardware business is still relatively young, but we’ve built a strong foundation of capabilities and products, including Pixel smartphones and Pixelbooks, Nest family of devices for the home, and more. 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. Looking ahead, we’re inspired by the opportunity to team with Fitbit to help more people with wearables."