Yahoo has scrapped plans to invest in French online video site Dailymotion, after the French government opposed the Internet giant acquiring a majority stake in the company, according to reports.
French Industry Minister Arnaud Montebourg told Yahoo chief operating officer Henrique de Castro and France Telecom chief financial officer Gervais Pellissier during a meeting in April that he did not want a 75 percent stake in one of France's best startups to be sold to a U.S. Internet giant, The Wall Street Journal reported, citing people briefed on the meeting.
The deal would have valued Dailymotion at US$300 million, according to the newspaper.
Earlier, French news reports had also indicated that the French government was opposed to Yahoo acquiring a majority stake in the company.
France Telecom bought 49 percent of Dailymotion in 2011, to meet increasing demand from customers for video content on mobile devices. The agreement provided for a progressive capital increase to 100 percent in 2013, which was completed earlier this year, and "the integration of new business partners."
To save the deal, France Telecom executives and government officials tried to turn it into a 50:50 partnership, which the U.S. company declined last week, WSJ reported.