Facebook buys virtual reality headset maker Oculus VR for R21.4 billion

Facebook will acquire Oculus VR, a maker of virtual-reality glasses, for $2 billion

By - March 26, 2014
Facebook

Facebook Inc will acquire Oculus VR Inc, a maker of virtual-reality glasses, for $2 billion, buying its way into the fast-growing wearable devices arena with its first-ever hardware deal.

The acquisition, which comes hot on the heels of its $19 billion deal for messaging service WhatsApp, is a bet on virtual-reality technology, which Facebook said is a strong candidate to emerge as the next social and communications platform.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and Chief Executive Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Startup Oculus VR raised $75 million in December in a round led by Andreessen Horowitz, to market its virtual-reality headset for video games and develop the product for use in areas like education, film, architecture and design.

Oculus plans to produce commercial versions of its virtual reality glasses, called Oculus Rift, which users mount on their heads with a strap. It also hopes to take its technology beyond gaming.

Facebook ended 2013 with $11.45 billion in cash and marketable securities. The company’s $19 billion acquisition of WhatsApp includes $4 billion in cash.

The Oculus deal comprises $400 million in cash and 23.1 million shares of Facebook common stock.

The transaction is expected to close in the second quarter.

(Reporting By Alexei Oreskovic, Malathia Nayak and Edwin Chan in San Francisco, and Lehar Maan in Bangalore; Editing by Don Sebastian)

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