Meta (NASDAQ:META) is reportedly considering acquiring up to a 5% stake in EssilorLuxottica SA, the maker of Ray-Ban, in a bid to enhance its push into smart eyewear. This potential investment would value the luxury eyewear group at approximately €4.5 billion ($4.9 billion), according to sources familiar with the discussions who requested anonymity due to the confidential nature of the information. The sources also noted that there is no certainty that the investment will materialize.
Strengthening Partnerships and Exploring New Technologies
Meta and EssilorLuxottica Collaboration:
Meta has already collaborated with EssilorLuxottica on Ray-Ban Meta smart eyewear. Acquiring a stake in EssilorLuxottica would further solidify this partnership with the world’s leading eyewear company. This move aligns with Meta’s broader strategy to leverage virtual and augmented reality technologies to enhance user engagement and loyalty.
Tech Industry’s AR and VR Ventures:
Other tech giants are also delving into AR and VR. Snap Inc. has been experimenting with mixed-reality spectacles for years, and Apple Inc. released its Vision Pro headset earlier this year. However, widespread adoption of these technologies remains limited.
Market Reactions and Financial Moves
EssilorLuxottica Share Performance:
Following news of the talks, EssilorLuxottica shares rose 4.6%, reaching €198.65 in Paris.
Meta’s Commitment to the Metaverse:
Meta has been investing heavily in the metaverse, a vision of the internet consisting of immersive virtual worlds accessible via headsets. CEO Mark Zuckerberg has promoted the metaverse as the next major computing revolution after mobile phones. In line with this vision, the company rebranded from Facebook to Meta to reflect its commitment to this future.
Bloomberg Intelligence Insights
Analyst Perspectives:
According to Bloomberg Intelligence analysts Mandeep Singh and Nishant Chintala, Meta’s potential stake in EssilorLuxottica suggests a strategic focus on augmented reality (AR) and smart glasses. Unlike Oculus VR, which Meta owns, this partnership would bolster Meta’s position in the AR space. They predict that AR devices, which currently ship in much smaller quantities than VR devices, could see significant growth due to their potential use in generative AI and virtual assistant functionalities.
Meta and EssilorLuxottica’s Smart Glasses History
Product Launches:
In 2021, Meta and EssilorLuxottica introduced their first Ray-Ban smart glasses, designed on the Wayfarer frame, allowing users to take photos and videos, listen to music, and answer calls. The latest versions of these glasses now feature MetaAI, an AI assistant based on Meta’s Llama AI model.
EssilorLuxottica’s Recent Acquisition
Supreme Acquisition:
On Wednesday, EssilorLuxottica announced an agreement to purchase the streetwear label Supreme from VF Corp. for $1.5 billion in cash. This acquisition adds Supreme to EssilorLuxottica’s portfolio, which also includes brands like Oakley sunglasses, expanding its lifestyle brand offerings.
Featured Image: Unsplash
