Par purchases D'Works

Viacom's board approved transaction yesterday

By JILL GOLDSMITH

Paramount Pictures has struck a deal to acquire DreamWorks SKG in a pact worth $1.5-$1.6 billion beating out rival suitor NBC Universal.

Par is putting up about half the purchase price with several financial partners shouldering the rest, sources said late Friday. It wasn't immediately clear who the other investors are or if the financing details were all in place yet.

Parent Viacom's board approved the transaction yesterday. A meeting today between studio head Brad Grey, 'new' Viacom CEO Tom Freston and DreamWorks SKG partner Steven Spielberg sealed the deal.

It's a bold move for Paramount, which had explored a possible bid recently but then pulled out. The idea was tabled due to the pricetag, plus the pending, and complex, split of parent Viacom into two separate companies. Now, the split of 'new' Viacom - which houses Paramount and MTV Networks - from CBS Corp., is all but done. The two companies will start trading separately on Jan. 3. Management has already been operating separately, which may have given Par the flexibility to seal a deal so quickly once it came back to the table.

Paramount is in particular need of content as its own slate has slimmed since an upheaval in the executive suite earlier this year. Jonathan Dolgen, Sherry Lansing and the old team were replaced nearly en masse by Grey, Gail Berman, Rob Moore and a host of new hires with a mandate to reinvigorate the sluggish studio.

They inked some sexy production deals, and created lots of buzz. But they also shuttered projects developed under previous management as they look to ramp up new production.

Michael Dolan, who will be chief financial officer of the 'new' Viacom, said last week it would take two or three years to turn Par around. This deal may bump things up.

Paramount will now have new product to pump through its newly independent foreign distribution network. A DreamWorks SKG purchase would include distribution of pics from sister company DreamWorks Animation, plus DreamWorks SKG's 60-title library.

Read the full article at:
http://www.variety.com/article/VR1117934352.html

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