The offer includes $400 million in cash and 23 million Facebook shares, which are valued at $1.6 billion. There is also a provision for an additional $300 million, depending on the future performance of the company.
The social networking site plans to expand the company’s scope to accommodate other industries, including gaming, communications, entertainment, education and media.
“Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform,” Facebook said in a statement.
The transaction should close by the second quarter of 2014.
Facebook signalled its ambition to diversify with the acquisition of mobile-messaging startup WhatsApp in a $19 billion deal in February this year.
This intention was further consolidated by the joint initiative the GSMA and Facebook launched last month, which is aimed at reducing the total costs of ownership of mobile, in an attempt to connect more people in emerging markets.
The move forms part of Facebook’s Internet.org partnership, which aims to make access to the internet more affordable.
Facebook’s Oculus acquisition also contributes to the social media giant's battle to compete with Google, as both companies aggressively compete to secure market share in emerging technologies.
