Google Pays $3.2 Billion to Buy a Thermostat Company
Published on: 14th Jan 2014
By: Ian Mansfield
Google has announced that it has entered into an agreement to buy thermostat manufacturer Nest Labs. for US$3.2 billion in cash.
Nest, which was founded by two former Apple executives sells thermostats and smoke alarms that learn a users behaviour in order to adapt their settings automatically. It's said that they can reduce domestic energy bills this way.
Larry Page, CEO of Google, said: "Nest's founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family."
The move is a further break for Google from its search origins and could prelude a more aggressive move into the M2M market if it ties the products in with its Android smartphones.
However, there will be investor concern that the company is becoming too diffuse and starting to behave more like a conglomerate of unrelated subsidiaries that usually ends up being broken up later on.
Nest will continue to operate under the leadership of its existing CEO, Tony Fadell and with its own distinct brand identity. Fadell, 44, worked with Apple's Steve Jobs in helping create the iPod and iPhone.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US. It is expected to close in the next few months.