Google parent company Alphabet has agreed to acquire wearable devices firm Fitbit for $2.1 billion. Fitbit shareholders would receive $7.35 per share in cash, a premium of about 19% to the stock’s closing price on October 31.
Fitbit shares were trading up 15% at $7.11, while Alphabet’s shares were mostly flat at $1,263.18 apiece.
Reuters reported on the potential deal last week.
Google has said that it will be transparent about the data it collects from the devices, adding that it would not sell it.
The search giant has been under several antitrust probes by the Justice Department, the U.S. House of Representatives Judiciary Committee and dozens of state attorneys general. The investigations allege that the company is using its huge market share to crush rival firms.
For its part, Fitbit has raised its own privacy concerns. The sexual activity of people using the devices were found to be accessible online in 2011. However, Google noted that it will allow Fitbit users to review as well as delete their data.
“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,” commented Fitbit CEO and co-founder, James Park.
Fitbit committed to data privacy and added that it will remain transparent on why and what data it collects. The company noted that it never sells personal data and that information will not be used for Google ads.
Qatalyst Partners served as financial adviser to Fitbit, while Fenwick & West provided legal advice, with the transaction expected to close next year.
Shares in Fitbit closed up 15.53% at $7.14 apiece on November 1.
