[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 12 December 2005, 00:16 GMT
Paramount buys rival Dreamworks
DreamWorks co-founder Steven Spielberg
Spielberg's more recent films have been released on DreamWorks
Hollywood giant Paramount Pictures has bought one of its best-known rival studios, Dreamworks SKG.

Viacom, which owns Paramount, has agreed to pay $1.6bn (914m; 1.36bn euros) - more than $1bn in cash, plus taking over Dreamworks' debts.

It gives the company the talents of one of the most famous filmmakers in the world, ET director Steven Spielberg.

And it appears to show that even a top name like Mr Spielberg cannot create a new independent film studio these days.

Dreamworks was established 11 years ago to combine three talents in the world of film, animation and music - Spielberg, David Geffen and Jeffrey Katzenberg.

Spielberg is known around the world for directing huge Hollywood hits like Jaws and Schindler's List.

Mr Geffen had been a top record producer and Mr Katzenberg a leading light at Disney.

NBC outbid

By buying Dreamworks, Paramount has now acquired an impressive library of films, which includes Gladiator, American Beauty, and Saving Private Ryan.

It reportedly plans to sell off the library, expecting it to fetch $850m to $1bn.

The deal does not include Dreamworks' animation studios - the creators of hits such as Shrek - but it does include the right to distribute already-made animated Dreamworks films.

Paramount will also take over a television division with long-running popular shows like Spin City.

NBC Universal, a unit of GE, had offered $900m but was outbid. Last Friday, it was given an extra hour to improve on its offer but walked away.

BBC North America business correspondent Guto Harri says Viacom hopes the deal will enable it to establish Paramount as an industry leader.

He adds that for Dreamworks, the deal is the final proof that despite the talents involved, the company has failed to become the ambitious media conglomerate that it had once hoped to be.

Recent Dreamworks films include Wallace & Gromit: The Curse of the Were-Rabbit and War of the Worlds - coincidentally a joint production with Paramount.

Mr Spielberg and Mr Geffen will reportedly stay with the company.


SEE ALSO:
Box office successes boost Viacom
01 Nov 05 |  Business
Viacom agrees to split business
15 Jun 05 |  Business
Radio review brings Viacom loss
24 Feb 05 |  Business
Wallace's US figures cost studio
11 Nov 05 |  Business
Dreamworks calls off merger talks
28 Sep 05 |  Entertainment


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific