Google to Acquire Fitbit in $2.1 Billion Deal, Taking on Apple in Wearable Fitness Segment

Press Release

Fitbit (FIT) on Friday said it has agreed to be acquired by Google for $2.1 billion in cash, a move that would put the internet giant in direct competition with Apple (AAPL) in the wearable fitness category.

San Francisco-based Fitbit said the Alphabet (GOOGL) unit will pay $7.35 per share for the company. Fitbit has 258.3 million shares outstanding.

“Google is an ideal partner to advance our mission,” said Fitbit Chief Executive James Park, who said his company’s namesake fitness trackers have more than 28 million active users worldwide. “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.”

Fitbit shares were nearly 16% higher in morning trading while Alphabet added 0.4%. Apple shares were 1.8% higher amid a broad market rally.

“Fitbit has been a true pioneer in the industry and has created terrific products, experiences and a vibrant community of users,” said Rick Osterloh, Google’s senior vice president of devices and services. “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.”

Fitbit said the deal is expected to close next year.

Fitbit said its “strong privacy and security guidelines” will not change after the acquisition, adding that data will not be used for Google advertising, Fitbit said.

Wedbush Securities said the deal would allow Fitbit to expand its health solutions business, where it has struggled, adding that it raised its price target to $7.35 from $4.

“The acquisition is another example of Google tilting at windmills,” Wedbush said. “Google is uniformly bad at consumer products in our views, and appears to be intent on spending whatever it takes to prove our view wrong.”

The analysts pointed to the failure of Google’s Nest products to generate noticeable revenue and its Home smart speaker as lagging in that segment.

Wedbush said it expects a Google-owned Fitbit “to remain entrenched well behind Apple’s watches and other inexpensive competitive products.”

This post was originally published on Health Opinion

Leave a Reply

Your email address will not be published. Required fields are marked *

Close