Fitbit Inc. is close to acquiring smartwatch maker Pebble, according to a person familiar with the matter, the latest sign of consolidation in the weakening wearables market.

The two sides are in advanced negotiations, the person said. If the deal goes through, Fitbit will likely shut down Pebble's brand, according to the person. Fitbit's interest is in Pebble's intellectual property, including its operating system, as well as its employees, the person added. Pebble is running out of money, according to this person.

For Fitbit, whose sales growth has slowed dramatically this year, the acquisition "signals greater ambitions in smartwatches, despite proving to be a nascent market," Citi Research analyst Stanley Kovler said.

Pebble is a small player in smartwatches. It controls 3.2% of the smartwatch market, according to research firm IDC, and ranks fifth in sales behind Apple Inc., Garmin Ltd., Samsung Electronics Co. and Lenovo Group Ltd. Fitbit, which is better known for its simpler fitness trackers, didn't rank among the top smartwatch vendors.

But Silicon Valley-based Pebble was one of the original pioneers of the smartwatch and is known for its dedicated fans. At a time when Apple and other smartwatch makers added lots of features to their designs, Pebble created lighter watches with a backlit display that allowed for longer batterylife.

It raised more than $30 million from three Kickstarter campaigns before launching its products. Pebble has also raised more than $25 million from venture investors. However over the past year, Pebble has struggled financially and laid off workers, according to a person familiar the deal talks.

News of the deal was first reported by The Information on Wednesday.

Write to Georgia Wells at Georgia.Wells@wsj.com

(END) Dow Jones Newswires

December 01, 2016 15:15 ET (20:15 GMT)

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