TMCnet Feature
May 01, 2013

French Officials Block Yahoo's Attempt to Purchase Key Stake in Dailymotion from Orange

By Ed Silverstein, TMCnet Contributor

The French apparently do not appreciate American firms taking control of French tech businesses. The latest victim was Yahoo – which was told by French authorities this week not to move ahead with a majority stake in Dailymotion.

Yahoo was trying to buying a stake in the YouTube (News - Alert)-like company from France Telecom/Orange.

“Rumors of problems with the deal have been swirling around for weeks,” TechCrunch reported.

The person who blocked the deal was identified in press reports as Arnaud Montebourg, the French minister of Industrial Renewal.

“Dailymotion is considered a marquee company in France’s technology industry,” one source told TechCrunch. “Hence, Montebourg didn’t want to let it go to the Americans.”

Montebourg’s office also issued a statement which said, "The minister expressed his desire that a partnership between Yahoo and Orange (News - Alert) (France Telecom) be built on an equal basis that would be beneficial to both sides."

Without the Yahoo investment, Dailymotion will have to look elsewhere for money. It could come from the French government, or if the private sector is preferred perhaps from France Telecom (News - Alert) or another business. One report suggested the company needs $65 million.Or, another company could try to acquire the stake in Dailymotion that Yahoo was after.

Yet, American companies are unlikely to get approval from authorities. The latest move may also lead to U.S. companies becoming more reluctant to get involved in such deals with French tech companies.

Also, French authorities have been cracking down on Google (News - Alert) – which like Yahoo is a tech company based in the United States.

Meanwhile, Reuters reported that Orange says there are ongoing discussions “with several potential investors” as Dailymotion tries to find “a partner outside Europe to accelerate its development.”

Previous news reports said Yahoo was interested in investing $200 million to $300 million in Dailymotion – which would have helped it expand globally.

In March, TMCnet reported that Yahoo may have purchased up to 75 percent of the France-based website.

France Telecom-Orange acquired Dailymotion for $170 million. Dailymotion was recently valued at about $300 million.

Edited by Jamie Epstein
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