U.S. company Yahoo has given up securing majority control in the online video platform Dailymotion from the France Telecom group because of the opposition of the Minister of Industry of France, Arnoud Montebourg, according to sources close to the situation cited by the Wall Street Journal.
The Minister told during a meeting in April Henrique de Castro, Yahoo directory operational and Gervais Pellissier, France-Telecom chief financial officer that he does not want a 75% of a rare success story in the French high-tech industry to reach the hands of foreigners, sources said.
Acquisition of a 75% stake in Dailymotion would have represented Yahoo’s largest transaction since the takeover of Yahoo’s highest job by the current chief executive officer, Marissa Mayer, in the msummer of last year. The two sides signed an uncommitted agreement for the acquisition by Yahoo of a 75% stake in Dailymotion, in a transaction that assesses the company at $300 million.
France Telecom, of which the French government controls 27% of the shares, wholly owns Dailymotion, but wanted a smaller stake in the Youtube competitor.
“I won’t let you sell one of France’s best startups,” said Montebourg to Pellissier on a high tone, according to Wall Street Journal sources.
Subsequently, attempts to save the transaction failed, even though France Telecom group is still open to a deal.
According to the U.S. newspaper, Yahoo wanted from the start to buy a 75% stake in Dailymotion, with the option of fully taking it over later, but the French government refused to accept a participation greater than 50%.
Cedric Tournay, Dailymotion chief executive officer, said last year that the company would like be to teamed up with a bigger web or a “financial partner because we do know we need to invest more on distribution, content and marketing.”
Shares of Yahoo (NASDAQ:YHOO) were down 1.72 percent to $24.30 at 2:30 PM (EST) while France Telecom (NYSE:FTE) shares were down 0.19 percent to $10.65.
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