Google has snapped up the Fitbit fitness tracker business in a $2.1bn (£1.6bn) deal that will enable the search giant to go toe-to-toe with Apple in the fast-growing smartwatch and wearables business.
Google is paying cash for the San Francisco-based Fitbit, which was set up in 2007.
It is paying $7.35 per share – a premium of more than 70% to the Fitbit share price before the shares were suspended earlier this week amid takeover speculation.
The price, however, is a fraction of the company’s value when it floated in 2015. The shares were initially priced at $20, and soared to more than $50 in the weeks following the initial public offer. But it has suffered in recent years from competition from bigger rivals Apple, Samsung and China’s Xiaomi.
The deal, which is Google’s biggest consumer purchase since it bought home-tech business Nest five years ago for $3bn, will have to be approved by shareholders and regulators, especially over how it handles Fitbit users’ data. Its fitness trackers store physical health data for users who track their activity and exercising using a range of wearable devices
Fitbit said it would not sell customers’ personal data and that wellness data would not be used by Google ads.
Google has offered its own fitness tracking service, called Google Fit, since 2014, but has relied on third parties such as Fossil to produce Android-compatible smartwatches.