Source: Reliance, DreamWorks close to deal
MUMBAI, India -- India's Reliance Entertainment and Hollywood's DreamWorks could finalize a deal to set up a new film company within a month, a person familiar with negotiations said today.
DreamWorks has been looking to raise as much as US$1.7 billion for the new venture, the person told The Associated Press on condition of anonymity because negotiations are ongoing.
Reliance Entertainment -- part of one of India's top conglomerates, Reliance ADA Group -- plans to invest US$500 million to US$600 million in equity, and more than that in debt funding, the person said.
Two other groups, which he declined to name, are in talks to cover the balance of funding, which would cover domestic U.S. distribution as well as film production costs, he said.
The deal would enable DreamWorks to become an independent production studio once again and bolster Bollywood's growing global ambitions.
Hollywood moguls Steven Spielberg, David Geffen and Jeffrey Katzenberg founded DreamWorks in 1994. The Wall Street Journal first reported in June that Reliance was in talks with DreamWorks, whose executives are looking to break away from Viacom Inc. and Viacom's movie studio, Paramount Pictures, and regain their independence.
Viacom bought DreamWorks SKG in 2006 for US$1.6 billion, but the relationship soured in spite of hits such as "Transformers" and "Dreamgirls."
Viacom CEO Philippe Dauman said last year his company was planning for Spielberg's possible departure following reports that the Academy Award-winning director was unhappy at Paramount.
It is not yet clear how the distribution of new movies and movies already under development with Paramount would be worked out if the Reliance deal goes through.
"This deal shows that the Indian entertainment industry is poised at the right juncture for a global interface," said Amita Sarkar, head of the entertainment division of the Federation of Indian Chambers of Commerce and Industry, a trade group.
"A tie-up with Spielberg means more business, more visibility and greater exposure on the international front," Sarkar said.
India's vibrant movie industry -- often called Bollywood -- has forged several collaborations with foreign studios.
Over the last two years Indian movie houses have signed co-production deals with Viacom, Walt Disney Co. and Sony Corp.
A movie venture with DreamWorks would help Reliance Group chairman Anil Ambani realize his international ambitions in the entertainment sphere.
Reliance Entertainment has as many as 100 films in production and development in India, and Reliance Big Entertainment, a group subsidiary, is focused on striking cross-border collaborations involving gaming, movies, online, animation and music.
During the Cannes Film Festival, Reliance Big Entertainment announced that it would invest US$1 billion to develop and co-produce movies with top Hollywood stars George Clooney, Brad Pitt, Tom Hanks, Nicholas Cage, and filmmaker Chris Columbus' 1492 Pictures.
In February, billionaire financier George Soros bought three percent of Reliance Big Entertainment for US$100 million.
One of the world's richest men, Ambani leads a conglomerate with interests in sectors from power generation and telecommunications to financial services.
