Meta Eyes Major Stake in Ray-Ban Maker to Lead Smart Glasses Revolution

Meta Platforms Inc., the company behind Facebook, is in talks to buy a minority stake in EssilorLuxottica SA, the manufacturer of Ray-Ban sunglasses. This move is part of Meta's effort to expand its presence in the smart glasses market.

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Currently, Meta collaborates with EssilorLuxottica on Ray-Ban Meta smart eyewear. The company is considering buying a stake between 3% and 5% in EssilorLuxottica, which could be worth about €4.5 billion ($4.9 billion). These discussions are still private, and there is no certainty that the deal will happen.

Spokespeople from both Meta and EssilorLuxottica have not commented on the matter. However, it is known that Meta has already received approval from U.S. antitrust authorities to purchase up to a 5% stake. The U.S. Federal Trade Commission also declined to comment.

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$META Meta Platforms Is Eyeing a Stake in Ray-Ban Maker EssilorLuxottica

-Meta Platforms stock is up on reports of it acquiring a stake in EssilorLuxottica.

-The company allegedly wants to spend $5 billion for a 5% stake in the company.

-Meta already works with… — InvestorPlace (@InvestorPlace) July 18, 2024

If Meta proceeds with the investment, it would strengthen its partnership with EssilorLuxottica, the world's largest eyewear company. This move would also boost Meta's influence in the virtual and augmented reality space, putting it in a better position against competitors like Snap Inc. and Apple Inc., which are also developing their own smart glasses and mixed-reality devices.

Despite these advancements, smart glasses and related technologies have not yet been widely adopted by consumers. This investment aims to change that by offering more advanced and appealing products.

Recently, EssilorLuxottica's shares rose by 2.3% to €194.20, while Meta's shares increased by 1.1% to $467.27 following the news.

This potential investment in EssilorLuxottica is not Meta's first big move. In 2020, Meta bought about 10% of Reliance Industries Ltd.'s Jio Platforms for $5.7 billion. This deal helped Meta expand in India, where the demand for online payments and e-commerce was rapidly growing.

Meta has invested heavily in the metaverse, a concept for the future of the internet involving immersive virtual worlds accessible through headsets. CEO Mark Zuckerberg believes this will be the next major computing revolution after mobile phones. The company's name change from Facebook to Meta reflects this focus.

By investing in EssilorLuxottica, Meta aims to strengthen its position in the augmented reality (AR) and smart glasses market. The market for AR devices is expected to grow significantly, with potential uses in artificial intelligence and virtual assistants. In 2021, Meta introduced its first Ray-Ban smart glasses in partnership with EssilorLuxottica. These glasses, based on the Wayfarer frame, allow users to take photos, record videos, listen to music, and answer calls. The latest models also feature MetaAI, an AI assistant based on Meta's Llama AI model.

Additionally, EssilorLuxottica recently agreed to purchase the streetwear brand Supreme from VF Corp. for $1.5 billion in cash. This acquisition adds to their portfolio, which already includes Oakley sunglasses.

Meta's strategic investment in EssilorLuxottica highlights its ongoing efforts to expand its presence in the smart glasses and AR market. By leveraging partnerships, Meta aims to drive innovation and growth, making these technologies more accessible and appealing to consumers.

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