Social-media behemoth Meta Platforms could be about to buy a small stake in the French-Italian eyewear giant that owns Ray-Ban, Oakley, and the streetwear-focused clothing brand Supreme.

Meta is in talks to acquire 5% of EssilorLuxottica, The Wall Street Journal reported on Thursday, citing people familiar with the matter. The position would be worth about 4.5 billion euros, or $5 billion, based on the latter companys latest market value.

EssilorLuxotticas Paris-listed shares and American depositary receipts both rose 4%. Meta stock climbed 2% to $471.22.

The rumored investment likely forms part of Metas strategy to crack the market for smart glasseswhich could help it achieve its longtime goal of building a so-called metaverse.

The Facebook, Instagram, and WhatsApp parent joined with Luxottica to launch its Ray-Ban smart glasses, known as Ray-Ban Meta, back in 2021. Wearers can use the devices to take photos and listen to music.

Advertisement - Scroll to Continue

In the past, Big Tech giants have found the market for these devices tough to crack. Alphabet s Google Glass, which failed due to an eye-watering $1,500 price tag and limited functionality, is probably the best-known example. Meta is said to be quietly confident that it can buck the trend, though, with sales of its Ray-Bans reportedly exceeding expectations.

Last year, Meta released a second-generation version of the smart glasses that feature the Magnificent Seven companys own in-house artificial intelligence assistant. They sell for $299.

Advances in AI allow us to create different [applications] and personas that help us accomplish different things, Zuckerberg said as he kicked off the gathering, CEO Mark Zuckerberg said as he introduced the new product. And smart glasses are going to eventually allow us to bring all of this together into a stylish form factor that we can wear.

Advertisement - Scroll to Continue

Cornering the smart glasses market could also be part of Metas strategy for building a metaverse. Creating a virtual-reality, 3D version of the internet where people can interact has become something of a white whale for Zuckerberg in recent years, even though hes yet to get much buy-in from investors.

Meta expects the third-generation version of its Ray-Bans to be ready for the 2025 holiday-shopping season and believes that buying a stake in EssilorLuxottica would open the door for the two companies to team up to produce more devices, per The Journals report.

EssilorLuxottica made a splashy acquisition of its own on Wednesday when it bought Supremethe New York skateboarding and streetwear brand best known for its iconic red box logofrom VF Corporation for $1.5 billion in cash.

Advertisement - Scroll to Continue

Meta declined to comment. EssilorLuxottica didnt immediately respond to a request for comment from Barrons.

Write to George Glover at george.glover@dowjones.com

See the rest here:
Metas Next Investment Might Not Be a Tech Company. Why the Facebook Parent Is Interested in Sunglasses. - Barron's