Facebook to buy Oculus for $2 billion

Last Updated 27 March 2014, 18:16 IST

Facebook is making its second big ticket acquisition within a month and acquire US-based virtual reality technology company Oculus for US$2 billion in a mixture of cash and stocks.

The acquisition of Oculus, famous for its virtual reality head mounted gaming displays, will give Facebook inroads into immersive gaming, besides, new verticals like communications, media and entertainment, education, etc.

The transaction is expected to close in April-June this year.

“This (deal) includes US$400 million in cash and 23.1 million shares of Facebook common stock (valued at US$1.6 billion based on the average closing price of 20 trading days preceding March 21, 2014 of US$69.35 per share),” Facebook said.

The agreement also provides for an additional US$300 million earn-out in cash and stock based on the achievement of certain milestones, it added.

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

Oculus will maintain its headquarters in Irvine, CA, and will continue development of the Oculus Rift, its ground breaking virtual reality platform.

Oculus is a leader in immersive virtual reality technology and has already built a strong interest among developers, having received over 75,000 orders for development kits for the company’s virtual reality headset, Oculus Rift.

On the acquisition, Facebook said: “While applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology.”

Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas, the firm added.

(Published 27 March 2014, 17:49 IST)

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