French indie distrib Diaphana has pacted to handle the Gallic theatrical distribution of productions and acquisitions from Nathanael Karmitz’s MK2, a six-decade icon of French arthouse production, distribution and exhibition

Housing all its content business under a new subsid, MK2 Films, run by MK2’s former international sales head Juliette Schrameck, MK2 will now focus on its international business, Karmitz told business entertainment publication Le Film Francais.

This includes film production, international sales and buying foreign titles for distribution in France.

MK2 will, however, maintain French TV sales and its home entertainment distrib operation in France and continue to invest in building its Gallic cinema circuit.

Karmitz, MK2’s CEO, attributed the Diaphana deal to hiked competition in French distribution, which makes mergers inevitable for Gaul’s indie distrib sector.

The move comes, Karmitz recognized, after three flagship releases for 2012 all underperformed at the French box office: Walter Salles’ “On the Road” grossed about €2.4 million ($3.3 million) in France, Olivier Assayas’ Venice player “Something in the Air” took just $989,586, and Abbas Kiarostami’s “Like Someone in Love” nabbed $399,057.

“We did not lose money because we sold these films to about 30 territories,” Karmitz said. “We asked ourselves where our priorities lay and decided they were our international and library business, not in theatrical distribution,” he added.