French industry minister denies country closed to foreign investment after vetoing Yahoo deal

PARIS - The French government is defending its veto over Yahoo Inc.'s attempted takeover of video sharing website Dailymotion, even as the move draws jeers for discouraging much needed foreign investment.

In an interview with The Associated Press, Arnaud Montebourg, the minister for industrial renewal, says the government's ownership stake in Dailymotion's parent company, France Telecom, gives it the right to overrule a deal if it deems it unfair.

Yahoo this week abandoned plans to take a 75 per cent stake in Dailymotion, a deal sought by the managements of both companies, after the government vetoed it.

Montebourg on Thursday also rejected accusations that the deal's collapse signalled France was pulling in the welcome mat to foreign investors. Montebourg says Yahoo was "welcome" as long it accepted a 50-50 split with France Telecom.