BUSINESS

Google enters wearables market with $2.1bn Fitbit deal

November 01, 2019
Fitbit banners decorate the exterior of the New York Stock Exchange during the IPO debut of the company in New York City in this June 18, 2015 file photo. — AFP
Fitbit banners decorate the exterior of the New York Stock Exchange during the IPO debut of the company in New York City in this June 18, 2015 file photo. — AFP

SAN FRANCISCO — Alphabet Inc-owned Google will buy fitness tracker pioneer Fitbit Inc for $2.1 billion, as the search giant takes on Apple and Samsung in the fast-growing market for wearable devices.

Google said on Friday that it sees an opportunity to introduce "Made by Google" wearable devices into the market and invest more in wearable technology.

Fitbit has been offered $7.35 per share in cash, the company said, a premium of about 19 percent to the stock's closing price on Thursday. The company's shares were trading at $7.18 in trading before the bell.

Fitbit shares have gained more than 40 percent since Reuters reported on Monday that Google had made an offer for the maker of the popular colorful fitness trackers.

The deal comes at a time when Fitbit's share of the fitness tracking market is being threatened by deeper-pocket companies such as Apple Inc and Samsung Electronics Co Ltd as well as cheaper offerings from China's Huawei Technologies Co Ltd and Xiaomi Corp.

"We believe Google is a natural fit. The deep health and fitness data, coupled with the 28 million active users on the Fitbit platform, offer a tremendous value," Craig Hallum analysts wrote in a note.

Fitbit said if Google fails to obtain antitrust approval for the deal, the internet company would need to pay a termination fee of $250 million.

Fitbit also said health and wellness data of its users would not be used for Google ads. Google said it would give Fitbit users the choice to review, move or delete their data.

Qatalyst Partners LLP was financial adviser to Fitbit on the deal, which is expected to close in 2020. Fenwick & West LLP was the legal adviser. — Reuters


November 01, 2019
50 views
HIGHLIGHTS
BUSINESS
2 days ago

The hidden power in your kitchen: Why scientists are studying palm oil's secret vitamin

BUSINESS
3 days ago

Dar wa Emaar enhances homeownership experience and reinforces commitment to quality of life in Saudi Arabia

BUSINESS
3 days ago

Al-Majdouie Peugeot launches the strongest offers this summer