A couple of days ago, it was reported that Google is in talks to acquire Fitbit. Today, the company has confirmed that it is all acquiring the wearable company Fitbit for $2.1 billion. This means that Google will be paying a price of $7.35 per share for acquiring Fitbit in an all-cash deal.
Google is paying a premium of over 70 percent to the Fitbit share price before the shares were suspended earlier this week amid the speculations of takeover. However, the price is a fraction of the company’s value when it started in 2015.
Initially, the company’s shares were priced at $20 but soared to more than $50 in the weeks following the initial public offering (IPO). However, due to the competition from bigger companies like Apple, Samsung, and Xiaomi, its shares suffered.
Commenting on this acquisition, Google SVP of devices and services Rick Osterloh said that the Fitbit purchase is “an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.”
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Fitbit CEO and co-founder James Park said in a statement: “Google is an ideal partner to advance our mission. 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 has struggled to establish its presence in the wearables market. However, the company now seems to be focused on making a dent in the wearable market, which is still pretty young and is growing rapidly.
It’s noteworthy that this acquisition of Fitbit isn’t the first one for Google. Earlier this year, in January, the company had purchased a major chunk of IP from Fossil related to smartwatch technology for a sum of $40 million.
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