French deals scuttled to protect strategic assets of yogurt, bottled water, and online video

May 1, 2013
May 1, 2013

It’s natural for governments to be protective of their homegrown companies, but the French can be particularly touchy. And it doesn’t seem to matter what the product is: From bottled water to yogurt to energy, they are all considered to be strategic assets for the French government.

The latest example is the French online video site Dailymotion. The Wall Street Journal reported that (paywall) Yahoo dropped a deal to acquire 75% of the company after the French government pressured Yahoo to take a minority stake instead.

In 2010, French food and beverage company Danone was in talks to sell its water business, which includes the Evian brand, to possible Japanese suitors. But the sale was known to be politically sensitive among government officials, who didn’t want to sell French brands to a foreign owner. And Danone wanted a rich price so a deal never went through.

Danone has already been in the crosshairs of deal politics. In 2005, the French government blocked Pepsi from acquiring Danone. At that time, French prime minister Dominique de Villepin called Danone a “flower of our industry.” Danone also makes yogurt and other dairy products.

A yogurt deal in 2011 was structured in a complicated way in order to satisfy French politicians. The French private equity firm PAI was able to sell its stake in Yoplait to General Mills by splitting the yogurt company into two parts. The Yoplait brand company was to be equally owned by General Mills and French farmers cooperative Sodiaal, while General Mills would own a 51% stake in Yoplait the operating company.

There wasn’t a similar compromise for the Dailymotion deal. French Industry Minister Arnaud Montebourg reportedly said he wouldn’t let one of France’s best startups be sold.

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