Paramount to Purchase DreamWorks

Paramount Pictures proposed a deal to buy DreamWorks SKG for $1.6 billion on Friday. This comes as a surprise since only two months ago Paramount showed no interest in buying the studio because parent company Viacom thought the asking price of $1.5 billion was too high. It was believed that NBC Universal was going to be the one to acquire the independent studio, which was created by director Steven Spielberg, studio executive Jeffery Katzenberg, and record executive David Geffen. NBC Universal had pursued DreamWorks for six months.

The deal will give Paramount control of the studio's sixty-film library along with the films that the studio is set to release next year. Paramount will also gain the distribution rights to movies made by DreamWorks Animation (DreamWorks Animation was spun off last year and is not part of the deal) and receive half of the profits from Spielberg's films that were made with another studio.