Google is set to acquire Fitbit. This move puts Google way ahead of Apple in the fitness tracking space.
At a fully diluted equity value, this deal values Fitbit around $2.1 billion, according to Friday’s announcement.
While shares of Alphabet were up 0.8%, Fitbit’s stock went down 16%.
Fitbit says that Google will pay $7.35 per share. And the deal is to close in 2020, according to the announcement.
On August 5th, 2015, Fitbit’s all-time high share price was around $51.90, a few months after entering the stock market at $30.40.
However, Fitbit’s stock went down 30% on Monday, after news that Google made a move to acquire Fitbit.
And going up by $340 million from the previous day, Fitbit’s market cap sat at $1.5 billion on Monday.
After the announcement, Rick Osterloh, Google’s hardware chief published a blog post explaining just how the acquisition can help Google advance its ambitions for Wear OS, its software for smartwatches.
“By working closely with Fitbit’s team of experts, and bringing together the best AI, software and hardware.
“We can help spur innovation in wearables and build products to benefit even 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.”
According to the announcement, Google doesn’t have plans to use health and wellness data from Fitbit for its ads after it acquires Fitbit.
News Source: CNBC
Photo Credit: CNBC