French minister didn't want a U.S. company taking a controlling stake in the video-sharing site, according to published reports.
Yahoo's bid to take a controlling stake in French video-sharing site Dailymotion has reportedly been killed by the French government.
Dailymotion, which is owned by France-Telecom, was in talks to sell a 75 percent stake to Yahoo, according to a report last month by The Wall Street Journal. The deal was expected to give Yahoo a much-needed boost in the overseas video-sharing space, which is mainly dominated by services like Google's YouTube.
While Marissa Mayer purchased a recommendations startup late last year to fortify Yahoo's presence on mobile, Dailymotion would be her first big acquisition since she took over as CEO. The site is said to be worth $300 million, making the value of Yahoo's reported deal at more than $200 million.
However, talks were suspended after opposition from the French government, which owns more than 27 percent of the telecom giant, French newspaper Le Monde reported last week.
France's minister of industrial renewal, Arnaud Montebourg, put an end to the discussions because he didn't want to see the American company take a controlling stake in the French company, a source told TechCrunch.
The French telecom company is reportedly still looking for an overseas partner to boost its international expansion efforts, and the U.S. is considered a key market to find such a partner. However, it's likely that the only way to appease the French government is for France Telecom to sell a minority stake, Le Monde speculated.
CNET has contacted Yahoo for comment and will update this report when we learn more.
The negotiations reportedly collapsed as Yahoo was ramping up its video offerings, announcing last week that it would be rolling out both archives and current episodes of "Saturday Night Live." The archives will be available across Yahoo sites starting in September and feature clips from 1975-2013 seasons.