Google parent company Alphabet wants to buy Fitbit and put the tech giant head to head with Apple in the field of training. The deal values Fitbit around $ 2.1 billion to a fully diluted equity value, according to Friday's announcement.
Fitbit's shares rose 16%, while Alphabet's shares increased by about 0.8%
Google will pay $ 7.35 per share in cash for acquisition, Fitbit said. Fitbit's high stock price for all time was $ 51.90 on August 5, 2015, a few months after the stock debut was $ 30.40. The agreement is expected to end in 2020, according to the announcement.
On Monday, the Fitbit share rose more than 30% on news that Alphabet had made an offer to acquire the smartwatch manufacturer. As of Monday's close, Fitbit & # 39; s market capitalization was $ 1
Fitbit Insire HR
Todd Haselton | CNBC
Following the announcement, Google Hardware Manager Rick Osterloh released a blog post explaining how the acquisition can help Google advance its ambitions for Wear OS, the smart watch software.
"By working closely with Fitbit's team of experts, and by bringing together the best AI, software and hardware, we can help stimulate innovation in portable devices and build products to benefit even more more people around the world, "Osterloh said. "Google also remains committed to Wear OS and our ecosystem partners, and we plan to work closely with Fitbit to combine the best of our respective smartwatch and fitness tracker platforms."
Google will not use Fitbit health and wellness data for its ads, according to the announcement.
The move comes after Google announced an agreement to buy $ 40 million in Fossil smartwatch technology in January. Fossil was already one of the main brands that built smart watches on Google's Wear OS.
Buying Fitbit could help Google expand its "ambient computing" hardware strategy, where the company aims to be a part of users' lives wherever they are. The company has hinted at the health and hardware ambitions with the introduction of several new products in October, including the new Pixel 4 smartphone, and the hiring of former Geisinger Health CEO David Feinberg last year to consolidate its healthcare strategy.
Fitbit has been facing headwinds as Apple's popular smart watch grows. Fitbit lowered its guidance for the year in its July earnings release, citing weaker-than-expected sales of its new lightweight watch.
As of the end of 2018, Apple owned approximately half of the global smartwatch market in terms of devices shipped, according to Strategy Analytics. Google currently licenses its Wear operating system to companies like Fossil, but does not create its own smart watch.
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