India's Reliance, other Investors in Talks with DreamWorks to fund

June 24, 2008 7:03:26 AM PDT
India's Reliance Entertainment and other investors are in talks with Hollywood's DreamWorks SKG to raise as much as US$2 to create a new movie venture, two people familiar with negotiations said Tuesday. Dreamworks, the movie studio founded in 1994 by Steven Spielberg, David Geffen and Jeffrey Katzenberg, is looking to raise a total of $2 billion from investors - $1 billion in equity and another $1 billion for new movie projects, the two people with knowledge of the talks told The Associated Press. They said they could not be named because negotiations were ongoing.

There are four to five other parties involved in the talks, including Universal Pictures, one of the individuals said.

Reliance Entertainment, the media arm of one of India's top conglomerates, the Reliance ADA Group, plans to invest more than $500 million to $600 million in equity, that same person said.

The Los Angeles Times reported last week that DreamWorks SKG is trying to raise about $1 billion to break from Viacom Inc. and its movie studio, Paramount Pictures.

Viacom bought DreamWorks SKG in 2006 for $1.6 billion, but the relationship has declined despite hits such as "Transformers" and "Dreamgirls."