Google on Thursday closed its acquisition of wearables company Fitbit, despite an ongoing investigation by the Justice Department.
Here are five things to know about the $2.1 billion deal:
1. Google, which posted $46 billion in revenue for 2020's third quarter, in November 2019 announced plans to acquire Fitbit for $7.35 per share in cash, paying an estimated $2.1 billion in total to stockholders. The deal could hint at Google's larger ambitions in healthcare, as the company has been building up its team, partnering with hospitals and investing in health-tech companies.
2. Fitbit, which reported $363.9 million in third-quarter revenue, provides an opportunity for Google to sell wearables in both the consumer and healthcare business markets. Fitbit, founded as a consumer wearables brand in 2007, in recent years has released health coaching services and activity trackers it sells to health systems and health plans, rather than direct-to-consumer.
3. Although Google officials initially said the company expected to close the acquisition in 2020, it faced monthslong investigations from regulators in multiple countries, who raised privacy and antitrust concerns. While European Union regulators approved the deal in December, the U.S. Justice Department on Thursday said it has not yet decided whether to pursue an enforcement action.
"The Antitrust Division's investigation of Google's acquisition of Fitbit remains ongoing," wrote Alex Okuliar, a deputy assistant attorney general in the department's antitrust division, in an emailed statement to Modern Healthcare. "The division continues to investigate whether Google's acquisition of Fitbit may harm competition and consumers in the United States."
It's not the first time Google's push into healthcare has entangled it in controversy. In 2019, a massive data-sharing partnership with St. Louis-based Ascension drew public concern over patient privacy.
4. Rick Osterloh, Google's senior vice president of devices and services, in a blog post Thursday stressed that Fitbit users' health data will stay separated from Google's advertising data and won't be used by Google to target ads. He said Google plans to continue to work with regulators to confirm the company is following those commitments.
"This deal has always been about devices, not data," Osterloh wrote. "We're confident the combination of Fitbit's leading technology, product expertise and health and wellness innovation with the best of Google's AI, software and hardware will drive more competition in wearables and make the next generation of devices better and more affordable."
James Park, Fitbit's co-founder and CEO, in a letter to customers Thursday said the acquisition will help Fitbit "innovate faster" to develop better products. "On our own, we pushed the bounds of what was possible from the wrist," he wrote. "With access to Google's incredible resources, knowledge and global platform, the possibilities are truly limitless."
5. Fitbit accounted for 5.9% of wrist-worn wearable device shipments in last year's third quarter, or 3.3 million units, down from 7.9% of shipments during the same period in 2019, according to a December report from market research firm International Data Corp. Chinese electronics company Xiaomi and Apple led the segment with 24.5% and 21.6% of shipments, respectively.