Meta Platforms Plans to Buy Stake in EssilorLuxottica, Expanding Partnership

EssilorLuxottica SA announced that Meta Platforms Inc. plans to obtain a stake in the world’s largest eyewear maker, signaling the US tech giant’s increased focus on smart glasses.

Chief Executive Officer Francesco Milleri discussed Meta’s interest during a call with analysts on Thursday, following speculation about the Facebook owner’s intentions. A Meta spokesperson declined to comment.

Market Reaction and Existing Partnership:

EssilorLuxottica shares surged 8.1% in Paris on Friday, marking the largest increase over two years. The two companies have collaborated for years, launching their first Ray-Ban-Meta smart glasses in 2021.

A deal with EssilorLuxottica would enhance Meta’s presence in the virtual and augmented actuality market for smart glasses while providing EssilorLuxottica with greater visibility, access to new markets, and fresh capital.

“We are proud that a company that knows us very well, after years of partnership, is convinced that our company can grow and do much better in the future,” said Milleri.

Potential Stake and Industry Competition:

Bloomberg reported earlier this month that Meta is considering acquiring up to a 5% stake in EssilorLuxottica. Milleri stated that if Meta decides to invest, it will have to purchase shares on the market, but he did not specify the size of the stake or the timing of the purchase.

Other companies are also exploring the smart glasses market: Snap Inc. has been experimenting with mixed-reality spectacles for years, and Apple Inc. released the Vision Pro headset earlier this year.

Financial Performance and Regional Growth:

EssilorLuxottica, the world’s largest manufacturer and retailer of eyewear, reported an adjusted net income of €1.75 billion ($1.9 billion) for the first half of the year, a 10.6% increase compared to the same period last year.

Revenues matched analysts’ forecasts at €13.3 billion. Strong performance in Europe, the Middle East, and Africa, where revenue rose 7.9% in the second quarter compared to the previous year, offset slower growth in North America, which was affected by a decline in comparable-store sales at Sunglass Hut.

Continued Collaboration on Smart Glasses:

EssilorLuxottica and Meta have been cooperating on smart glasses for several years. In 2021, Meta unveiled its first Ray-Ban smart glasses using the Wayfarer frame.

These glasses allow users to take photos and videos, listen to music, and answer calls. Newer models include MetaAI, an artificial intelligence assistant based on Meta’s Llama AI model.