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Microsoft sells Softimage to Avid

The software giant is selling the digital media business for $285 million while keeping a minority stake in Avid.

Here's a switch: Microsoft is selling a company, not buying it.

The software giant said today it would sell Softimage, a digital media business, to Avid Technology. Microsoft will keep a minority stake in Avid.

According to Avid, the deal is valued at $285 million in cash and stock. Upon completion of the deal, Microsoft will own about 9.1 percent of Avid's outstanding stock. It has agreed not to buy any more stock for five years, as well as maintain its investment for a minimum of three years.

"Avid is a better partner, because it's in that space," a Microsoft spokesman said. The software giant bought Softimage about four years ago, and it was approached by Avid about selling it, he added.

Softimage's workers will remain in the company's Montreal headquarters. Both sides expect to close the deal in July.

In April, Microsoft introduced a new multimedia file format strategy for Windows, meant to replace the so-called Audio Video Interleaved format. The new format was developed by Microsoft along with Adobe Systems, Avid Technologies, Digidesign, and Softimage.

During the past year, Microsoft has been expanding into the multimedia industry, through investments in Progressive Network Solutions and VXtreme. Industry executives and analysts have speculated that some of these video-streaming deals may have drawn the scrutiny of antitrust regulators. Microsoft said today's announcement has nothing to do with any possible antitrust investigation.