Google owner Alphabet has signed an agreement to acquire Fitbit in a deal that values the wearables firm at $2.1bn.
The acquisition will give Google a solid foundation to enter the wearables market. While Apple and Samsung have developed wearable products, Google is yet to successfully break into the market.
Fitbit is a leader in the fitness tracker and smartwatch market, boasting 28 million active users worldwide.
“Google is an ideal partner to advance our mission,” said James Park, co-founder and CEO of Fitbit.
“With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone. I could not be more excited for what lies ahead.”
Google acquires Fitbit: Privacy concerns
The 12-year-old firm has sold more than 100 million devices. However, it has recently struggled in the face of growing competition.
Rick Osterloh, senior vice president, devices & services at Google, said:
“Fitbit has been a true pioneer in the industry and has created terrific products, experiences and a vibrant community of users.
“We’re looking forward to working with the incredible talent at Fitbit, and bringing together the best hardware, software and AI, to build wearables to help even more people around the world.”
In a press release, Fitbit said that it will remain “platform-agnostic across both Android and iOS”.
Addressing concerns around user data, Fitbit added: “The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.”
However, Paul Bischoff, privacy advocate at Comparitech.com, said:
“Fitbit says health and wellness data will not be used for advertising, but that leaves plenty of other information for Google to gather, including users’ locations, device info, friends’ lists, messages, profile photos, participation in employee wellness programs, and usage logs.
“That being said, Fitbit was already using this information for marketing, advertising, and analytics purposes. The main difference here is just that Google now has all that data instead of just Fitbit.”
Google’s offer values Fitbit at $7.35 a share, a premium of around 19%. The transaction is expected to complete in 2020, subject to “customary closing conditions”.
Confirmation of the deal comes days after Reuters reported Google’s interest in buying the smartwatch firm. Fitbit’s shares are up 40% since the first rumours were published on Monday.