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It has now been confirmed that Google’s parent Alphabet and Fitbit would be closing a deal at a valuation of $2.1 billion.
About a week ago, rumors regarding Google’s parent Alphabet’s decision to acquire American wearable maker Fitbit, surfaced online. Now, Google has officially confirmed that it will buy the Fitbit company in a new deal worth $2.1 billion. This move from Google can be said to be one in the direction of the tech giant’s desire to hold a larger stake in the wearables business, an area mostly dominated by a rival company Apple.
An official statement from Google’s Senior Vice President for Devices & Services, Rick Osterloh, corroborates this, explaining that Google wants to delve deeper into wearables and this acquisition will give the company an opportunity to “introduce Made by Google wearable devices into the market.”
Fitbit (FIT) shares recently jumped as much as 30%, when it was first announced that Alphabet had made an acquisition proposal to the wearables maker. By the day’s end, the former’s market camp had surged $340 million from the day before, and hit $1.5 billion. Alphabet’s stock has now gone up 0.8% with Fitbit’s reaching 16%. The $2.1 billion deal means that Google will make the acquisition at $7.35 per share.
Osterloh’s statement further expresses some excitement at the opportunities that could easily be birthed by the collaboration between both firms for innovation in the product’s offerings. The statement reads:
“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.”
Fitbit’s own statement further specifies “strong privacy and security guidelines” that will guide all of the company’s offerings, even after the acquisition. In a bid to allay any fears that might come up especially with information being accessed by Google, Fitbit promises that transparency will be maintained and data will not be exploited.
“Fitbit will continue to put users in control of their data and will remain transparent about the data it collects and why. The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.”
Earlier this year, Google announced a deal with another smartwatch maker, Fossil, to acquire its technology for $40 million. Fossil already works with Google as it produces watches that are powered by Google’s Wear OS.
While no exact specifics can really be said about the future of the acquisition, it is, however, common knowledge in the industry that Google has been looking to be a more integral part of the lives of its users and has also mentioned in the past, its interest in health. Back in November last year, Geisinger Health CEO David Feinberg was chosen by Google to lead and develop effective strategies for the company’s foray into health care. The acquisition of Fitbit could easily be an integral part of its overall healthcare efforts.