On 1 November, Google officially announced the acquisition of popular fitness brand Fitbit in a deal worth an estimated $2.1 billion (R31,176,390,000).
As part of the deal Fitbit will be integrated into Google’s hardware team, forming a new generation of fitness based wearables that will run on Googles Wear OS.
Fitbit’s market capitalization rose to around $10 Billion after they went public in 2015. However, due to stiff competition from the likes of Apple, Huawei and Samsung the value steadily dropped over the years. Currently their market cap is around $1.6 billion.
Google and Fitbit hope that the merger of the two companies could put them back in direct competition with their counterparts when it comes to devices like smartwatches and wearable electronics.
“With Google’s resources and global platform Fitbit will be able to accelerate and innovation in the wearable’s category, scale faster and make health even more accessible,” said James Park, CEO of Fitbit in a statement.
The merger of the two companies is expected to be finalized next year, pending approval from regulators and current Fitbit shareholders.
Alphabet, Google’s parent company who is behind the $2.1 billion deal, said they will be paying $7.35 per share for the company.
Fitbit has assured users that their products will continue to work on both iOS and Android devices in the future. Google has also said that while they will collect your data through the wearables, “Fitbit health and wellness data will not be used for Google ads”. Only time will tell if the merger of these two giants will be enough to compete with other brands like Apple and Samsung.