HONG KONG-- PCCW Ltd. said Monday it withdrew from discussions to purchase a stake in video-streaming site Dailymotion from Orange SA after the French economy minister spoke out in opposition to the bid from the Hong Kong-based telecommunication company.

"[A]n environment where policies appear to favour a French or European solution is discouraging for international business participation," PCCW said in a statement. "We will therefore withdraw from our discussions with Dailymotion and its current owners."

PCCW, the telecom company controlled by Richard Li, the son of Hong Kong tycoon Li Ka-shing, made an offer to buy a 49% stake in the video-streaming site that would have valued Dailymotion at about EUR250 million ($264.5 million) including debt, a person familiar with the situation said in March.

Write to Rick Carew at rick.carew@wsj.com

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