Orange and Vivendi have entered into exclusive discussions over the sale of an 80 percent stake in video platform Dailymotion.
The two companies have settled on an acquisition price of €217 million, with Orange aiming to keep a 20 percent stake in the business it has worked with since 2011.
The France-based telco said the deal met its target of bringing Dailymotion together with a “strategic content-focused partner”.
It added that Vivendi would help to accelerate Dailymotion’s growth and to turn it into “one of the world’s largest content distribution platforms”.
Dailymotion, a French version of YouTube, gets just 128 million monthly unique visitors despite being available around the world in 18 different languages.
It had a turnover of €64 million last year, representing year-on-year growth of 30 percent.
The two companies revealed this morning that Vivendi had made an offer after PCCW pulled out of talks with Orange.
France’s Economy Minister Emmanuel Macron said last week that Orange should look at a range of offers and that keeping Dailymotion as a European company was important.
Dailymotion employs 222 people, mainly in France and the USA.
Stéphane Richard, Chairman and CEO of Orange, said: “Orange has supported the development of Dailymotion since 2011 as the company has increased its audience by 2.5 [times] and grown into one of Europe’s biggest success stories in the digital domain.
“Our partnership with Vivendi will enable Dailymotion, in which we remain a 20 percent shareholder, to accelerate its growth internationally and to enhance its content offer.”
Orange said it would use the proceeds from this transaction to “reinforce its efforts in the digital ecosystem”.
Last month, the operator announced it is targeting €1 billion in revenues from connected objects and mobile financial services over the next three years.
For Vivendi, the deal reconfirms its focus on its core media business. The company has been selling off its telecoms assets, such as mobile operator SFR, in recent times.
It said there are “numerous opportunities” for collaboration between Dailymotion and assets such as Universal Music Group and Groupe Canal+, which it owns.
Vincent Bolloré, Chairman of Vivendi’s Supervisory Board, commented: “The acquisition of 80% of Dailymotion’s capital is an excellent opportunity that will provide the group with added reach in the diffusion of high-quality musical and audiovisual content across the world.
“This is a first step in our ambition to create a large, global group that is focused on media and content.”