Orange and Vivendi entered into exclusive negotiations regarding the acquisition by Vivendi of an 80 per cent stake in France-based online video-sharing site Dailymotion for €217 million ($235 million), as Orange seeks to raise funds "to finance and reinforce its efforts in the digital ecosystem."
The announcement came after Hong Kong conglomerate PCCW said it had ended talks with Orange over a possible Dailymotion alliance because the French government had expressed a preference for a European partner, Reuters reported. France's government is the biggest shareholder in Orange with a 25 per cent stake.
"The French government's preferred search for a European solution discourages international companies' participation," PCCW stated.
Dailymotion, which is described as a smaller rival to YouTube, has been up for sale for around two years. Previous talks with Yahoo also collapsed after the French government called the asset strategic and blocked its sale to a foreign investor, Bloomberg said.
Bloomberg also noted that Orange recently received a rival bid from Germany's ProSiebenSat.1 Media.
"We've sought the right partner many times--a partner with international reach and a foot in the content world," Orange CEO Stephane Richard told officials during a National Assembly (France's lower house of parliament) hearing this week. "It wasn't a simple task."
Orange, which will retain a 20 per cent stake in the company, has owned 100 per cent of Dailymotion since January 2013 after first buying a 49 per cent stake in April 2011. The France-based operator said it is now time to pass on the task of developing the video-sharing company to a "strategic content-focused partner that is capable of giving it the means to accelerate its growth and to turn it into one of the world's largest content distribution platforms."
Orange describes Dailymotion as the second-largest aggregation and distribution platform in the world, with over 2.5 billion videos seen per month. The company registered sales of €64 million in 2014. It employs 222 people in the world, based mainly in France and the U.S.
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