Vivendi Buys Majority Stake in DailyMotion

Vivendi Chairman Vincent Bollore - H 2015
AP Images

Vivendi Chairman Vincent Bollore - H 2015

The media conglomerate had been in exclusive talks with owner Orange since April.

The fate of DailyMotion has finally been sealed, with CanalPlus and Universal Music Group owner Vivendi announcing it has acquired an 80 percent stake in the YouTube competitor from Orange for $241 million (€217 million).

Vivendi had been in exclusive discussions for the stake since April.

In a statement, the media conglomerate indicated it intends to continue to grow DailyMotion as a platform to reach the digital generation for its music, film and television program properties.

“The integration within Vivendi offers Dailymotion the means to strongly accelerate its growth and continue its international expansion. It gives the company access to particularly attractive music and audiovisual content and allows for the joint development, together with Universal Music Group and CanalPlus Group teams, of original and distinctive content and formats meeting the expectation of a whole new generation of digital consumers,” the company said in a statement.

“This acquisition is at the core of Vivendi’s digital strategy. With Dailymotion, the Group benefits from an over-the-top distribution platform of international stature and of a technological expertise, which complements the Group’s existing one.”

Orange will retain 20 percent of the company.

The purchase of DailyMotion follows its longstanding search for a deep-pocketed buyer to help its international expansion plans. Orange (formerly France Telecom) had been seeking a buyer since 2013, when it entered into an agreement with Yahoo for a 75 percent stake in the company for $300 million (€227 million).

That deal was stopped by the French government, which insisted on a 50-50 split of the company before Yahoo backed out of the deal. Subsequent talks with Microsoft also fell through.

Earlier this year, Orange and Hong Kong-based telecom PCCW entered into exclusive negotiations before the government said it would also oppose a Chinese deal, and PCCW backed out just days later.

DailyMotion is the second-largest video platform after YouTube, but has only a fraction of its viewers. The company had 351 million views last month, while YouTube had more than 15.2 billion.

Vivendi has been transforming itself from a telecom to a media company. It launched the Global Music Data Alliance earlier this year to boost revenues in its UMG arm through data mining and marketing partnerships.

It also created Vivendi Contents to develop new formats, which is likely to be one of the projects that will most easily synergize with DailyMotion.

Vivendi’s stock was down 1.24 percent in after-hours trading.