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Dailymotion sales to Yahoo won't go through

The French government blocked the sale of Dailymotion to American giant Yahoo. The intervention sounds like a bad signal to foreign investors when it comes to French companies.


The announcement was made this week by the Minister of productive recovery, Arnaud Montebourg (picture). 

the French minister of productive recovery


Yahoo and the Paris-based Dailymotion board were reported to have agreed on the sale of 75% of the video platform. However, in a dramatic twist, the French authority put his veto on the deal on the sole fact they wanted a maximum 50 – 50 % agreement in order to keep one of the few digital French success at home.


What is difficult to understand and hard to understand on both side of the Atlantic is, why did the French administration intervened in the deal between two companies. Form the point of view of the video sharing website, they were desperate to made a first step on the American market. 


In fact, Dailymotion is own at 49% by Orange and 27 % of Orange is owned by the French state. Even the Orange CEO, Stephane richard, was enraged by the decision. It has been understood that Orange bought shares in Dailymotion 2 years ago from the French government but never really took care of it as it was too far way form their usual business model. Investment were reduced to the minimum and the sale would have generate more than 100 million € capital gain. 

To sum up, the French state which was indirectly a minority shareholder of the French start up had enough power to block a sale at any time. The financial times called that nationalism this week on their website. What will it mean for future investor when it comes to acquiring French companies? Please, give us your thoughts.

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