Fossil Group announced plans to sell to Google for $40 million intellectual property (IP) related to a smartwatch technology currently under development by Fossil Group.

As part of the transaction, a portion of Fossil Group’s research and development (R&D) team currently supporting the transferring IP will join Google. Fossil Group retains more than 200 R&D team members to focus on innovation and product development.

Fossil has successfully developed and launched smartwatches across 14 of its owned and licensed brands.

“Fossil Group has experienced significant success in its wearables business by focusing on product design and development informed by our strong understanding of consumers’ needs and style preferences,” said Greg McKelvey, Executive Vice President and Chief Strategy and Digital Officer, Fossil Group.

“We’ve built and advanced a technology that has the potential to improve upon our existing platform of smartwatches. Together with Google, our innovation partner, we’ll continue to unlock growth in wearables.”

“Wearables, built for wellness, simplicity, personalization and helpfulness, have the opportunity to improve lives by bringing users the information and insights they need quickly, at a glance. The addition of Fossil Group’s technology and team to Google demonstrates our commitment to the wearables industry by enabling a diverse portfolio of smartwatches and supporting the ever-evolving needs of the vitality-seeking, on-the-go consumer,” said Stacey Burr, Vice President of Product Management, Wear OS by Google.

The transaction is expected to close this month.

For Google, this could be a big chance for it to turn WearOS around and truly try to compete with the Apple Watch.

All of Fossil's digital-faced smartwatches run on Google's Wear OS, so the two companies have already worked together for quite some time. But Fossil is one of many companies to develop "hybrid" smartwatches, most of which have analog faces.

With the acquisition, it is possible that Google wants to look into the "hybrid" side of smartwatches.

Fossil also acquired wearable company Misfit back in 2015. Misfit smartwatches and trackers used side buttons to control smartwatch functions, like taking a photo with the phone's camera or pausing music playback.