There were a number of companies, in addition to Google, that had an interest in acquiring Fitbit. A filing with the SEC has disclosed that the search giant was successful in beating out a competing offer from Facebook to acquire the wearable technology startup.
At the beginning of this month, the transaction was officially announced. Under the terms of the agreement, Google will purchase Fitbit in an all-cash transaction that will total around $2.1 billion. Google will pay $7.35 for each share of Fitbit. Along the same lines as Nest, Fitbit is going to join Google itself. It is anticipated that the acquisition will be finalized in the year 2020, pending all requisite clearances.
The information did not constitute much of a shock to anyone. Fitbit, which was an industry pioneer when it came to wearable technology, has been having difficulty as of late in making a significant impression in the fast-expanding smartwatch segment. Its market share of wearable devices has been eroded by competitors such as Apple, Samsung, and Garmin, in addition to a variety of low-cost products produced by Chinese businesses.
There was speculation that Google wasn’t the only company interested in purchasing the wearables manufacturer in San Francisco. It was already common knowledge that one of the unknown competitors was Facebook, a company that, like the others, recognized the potential of this market. This information was obtained from a recent filing with the SEC, as reported by CNBC.
Both businesses have, up to this point, chosen not to comment, although the document does provide some facts. It would appear that James Park, CEO of Fitbit, had dinner in June of this year with “the chief executive officer of Party A” to discuss the competitive environment of the wearable technology industry. Mark Zuckerberg, the current CEO of Facebook, was that individual. Another meal between the parties was scheduled to take place at the beginning of July, and then another one was planned for the month of September.
In October, Facebook made a series of offers to acquire Fitbit; however, Google’s best offer of $7.35 per share was higher than Facebook’s top offer of $7.30 per share. Apparently, that was the highest offer that Facebook was willing to make, and the company has no intention of making another offer for Fitbit.
The acquisition by Google is expected to be finalized the following year, although this news has not been welcomed by many. Concerns regarding privacy are being raised by some Fitbit customers, while others are anxious about the future of the company that makes wearables. It is important to remember that you have choices about what to do with your data if you fall into this category.
The highly anticipated Google Pixel watch has not yet been released, but we continue to keep our fingers crossed. Let’s keep our fingers crossed that the deal with Fitbit will materialize this idea very soon.