Under the terms of the negotiations, Orange will retain a 20% stake in Dailymotion, which will take on an enterprise value of €265 million.
Vivendi said the deal represents an important step forward in its efforts to “create a global group and French champion in the media and content industries.”
The French media giant said there will also be numerous opportunities for collaboration between Dailymotion and other Vivendi assets, such as Universal Music Group and Groupe Canal+.
“The acquisition of 80% of Dailymotion’s capital is an excellent opportunity that will provide the group with added reach in the diffusion of high-quality musical and audiovisual content across the world,” said Vincent Bolloré, chairman of Vivendi’s supervisory board.
“This is a first step in our ambition to create a large, global group that is focused on media and content. In addition, this operation illustrates our capacity to develop international strategic partnerships, in particular with Orange.”
Orange chairman and CEO Stéphane Richard added: “Our partnership with Vivendi will enable Dailymotion, in which we remain a 20% shareholder, to accelerate its growth internationally and to enhance its content offer. The proceeds from this transaction will enable Orange to reinforce its efforts in the digital ecosystem.”
Orange has held 100% of Dailymotion since January 2013, following its initial acquisition of 49% of the company’s capital in April 2011.
Over this time, Orange claims Dailymotion has increased its audience by a factor of 2.5, with more than 2.5 billion videos viewed on the site each month.
The company employs 222 people, based mainly in France and the US and made sales of €64 million in 2014 – a figure that has increased by 30% each year since 2012.
Orange and Vivendi will now enter into a period of exclusive negotiations to finalise the terms of the agreement, according to a joint statement issued by the three companies.
The news comes after Hong Kong-based telecoms company PCCW ruled itself out of the running for a stake in the business.