Fitbit sale to Google

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According to the New York Times, Google said on Nov. 1 that it is acquiring Fitbit, the maker of fitness-tracking devices, for $2.1 billion to close the gap with Apple in the growing market for wearable electronics and to add muscle to its expanding hardware business.

Questions:

  1. Why is the deal is likely to face regulatory scrutiny? On what basis?
  2. How old is the Fitbit company?
  3. What product is a direct competitor to FitBit?
  4. What is the market share of FitBit versus its direct competitor identified in question 3?
  5. If Google fails to secure permission from the SEC to buy FitBit, how much will it have to pay FitBit?
  6. If you were Google’s CFO, how would you account for the amount of money pledged in Question No. 5 above?  

Source:

Wakabayashi, D. and Adam Satariano. (2019). Google to Buy Fitbit for $2.1 Billion. The New York Times, Nov. 1 (Retrievable online at https://www.nytimes.com/2019/11/01/technology/google-fitbit.html)