FitBit, a smartwatch device maker has been purchased by Google for $2.1bn. The purchase gives Google the chance to expand into the fitness trackers and smartwatches market. It comes at a time when loss-making Fitbit has been looking to expand into other areas.
The bid values Fitbit at $7.35 a share, a premium of about 19% to the stock’s closing price.
“Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster and make health even more accessible to everyone,” said James Park, co-founder, and chief executive of Fitbit. who founded Fitbit 12 years ago.
The company, one of the first sellers of tech-enabled fitness trackers, was valued at more than $4bn at the time of its flotation in 2015.
It has sold more than 100 million devices but has struggled with waning demand for its products as other companies enter the market. It put itself up for sale last month. Its shares have jumped 40% since Monday when Reuters reported the interest from Google.
The transaction is expected to be completed in 2020, pending approval by the board and regulators. Regulators in the US and abroad have been taking a closer look at acquisitions by the tech giants, amid growing concerns about monopoly power.