(Reuters) – Fossil Group Inc said on Thursday it would sell its intellectual property related to a smartwatch technology currently under development to Alphabet Inc’s Google for $40 million (£31 million), sending the watchmaker’s shares up as much as 11 percent.
The sale will see a portion of its research and development team currently working on the technology moving to Google.
The deal is expected to close in January, Fossil said.
“The addition of Fossil Group’s technology and team to Google demonstrates our commitment to the wearables industry,” Stacey Burr, vice president of product management at Google’s Wear OS, a smartwatch platform, said.
Fossil, which recently launched a new offering called ‘Sport’ that comes with Wear OS, said smartwatches have become its fastest growing category.
“Together with Google, our innovation partner, we’ll continue to unlock growth in wearables,” Greg McKelvey, Fossil’s chief strategy and digital officer, said.
Fossil’s shares were last up 8.3 percent at $18.87.
(Reporting by Nivedita Balu in Bengaluru; Editing by James Emmanuel)