Google has said that it is buying Fitbit for $2.1 billion. The acquisition will make the tech company one of the biggest players in the growing wearable electronics market.
In a statement released by Fitbit on Friday, the company said that its buyer was paying $7.35 per share in cash. The 12-year-old company which is based in San Francisco had managed to compete against big brands like Apple in the wearable electronics markets. The company spearheaded wearable technology and its fitness devices were thriving in the market until the emergence of smartwatches that could take calls, send messages and keep track of athletic activity. Their biggest competitor was Apple.
After Apple launched its own wearable device called the Apple watch in 2015, financial analysts wondered how Fitbit will be able to keep up with the competition from such a big brand. Over time Apple has continued to improve its smartwatch adding new features like the heart monitor app. Fitbit on its part has tried to make its product more sophisticated since the arrival of the Apple watch. Although it added a couple of new features to its latest wearable device, the company has not been able to compete favorably with Apple.
Google’s acquisition of the wearable technology company Fitbit bolsters its lineup of hardware products. After Fitbit announced on Friday that the tech giant was paying $7.35 per share in cash, its shares rose 15 percent. Financial analysts have said that Google’s decision to buy an already recognized brand makes more sense than buying a smaller brand and building it to become a competitor to Fitbit and Apple. The acquisition deal is expected to close sometime in 2020.
The deal, however, raises regulatory concerns especially as Google has been subjected to antitrust investigations in the United States and Europe. The Fitbit device collects health information from its users and some ate concerned that Google will have access to this sensitive information. The internet company has said that it will not use health data received from the devices in its advertising business.