Paramount bags DreamWorks for $1.6 bn

Paramount bags DreamWorks for $1.6 bn

Paramount Pictures has acquired DreamWorks SKG, the studio owned by Oscar-winning movie maker Steven Spielberg along with movie industry executive Jeffrey Katzenberg and music entrepreneur David Geffen.

Paramount, owned by Media behemoth Viacom Inc., will pay $1.6 billion including cash and assumption of liabilities to secure control of DreamWorks. A deal to this effect was clinched on Sunday in Hollywood. Chairman and CEO of Paramount Pictures, Brad Grey, announced the acquisition.

This is slated to be a major shot in the arm for Paramount which can now boast of exclusive possession of DreamWorks' projects currently being developed. In addition, a production partnership with Steven Spielberg and David Geffen also gets underway as also a pact with DreamWorks Animation starting from 2006 that confers exclusive, worldwide distribution rights on Paramount.

Besides, the new parent will also get DreamWorks' live-action library along with DreamWorks' television division and its properties, not to mention exclusive rights to future DreamWorks Animation characters in TV shows.

Founded in 1994, DreamWorks was a brave attempt by the celebrated trio to set up an independent movie and television establishment.

According to industry analysts, the studio has a line-up of 50-odd movies which might fetch Paramount about 1 billion dollars. DreamWorks' library includes blockbusters and critically acclaimed movies like Gladiator, American Beauty, War of the Worlds, and Catch Me if You Can, which Paramount intends to sell off to bring down the acquisition cost, said the statement.

Once the acquisition process is completed, fresh employment agreements will be inked designating Spielberg as producer/director and Geffen as Chairman. Katzenberg will continue to hold the office of CEO of DreamWorks Animation.

Paramount announced that DreamWorks would contribute four to six live-action films of the 14-odd films it is targeting to make during the coming year.

NBC Universal, owned by General Electric, was also in the race to buy DreamWorks.