Viacom Inc.'s Paramount Pictures unit is in talks to buy DreamWorks SKG for more than $1 billion, topping an offer by NBC Universal, people briefed on the talks said.
DreamWorks yesterday ended discussions with NBC Universal, said one person who spoke on the condition of anonymity, leaving Paramount as the likely buyer. Paramount, based in Los Angeles, plans to put up more than $200 million and is seeking about $800 million from outside investors, said another person.
The Wall Street Journal reported last night that Paramount will pay $825 million to $900 million for DreamWorks and assume $500 million in debt, citing unidentified people familiar with the situation.
Viacom spokesman Carl D. Folta didn't return phone calls seeking comment. DreamWorks spokeswoman Diana Loomis and NBC Universal spokeswoman Kathy Kelly-Brown declined to comment.
Paramount and NBC had been competing for the studio founded by Steven Spielberg, Jeffrey Katzenberg and David Geffen that includes a library of about 60 films, including "Saving Private Ryan" and "Gladiator." Buying DreamWorks would be a coup for Paramount chief Brad Grey, who was hired by Viacom Chairman Sumner M. Redstone this year to revive the studio.
Paramount rose to sixth place in the box office this year, from seventh in 2004. Paramount's 2005 films, including "War of the Worlds," generated receipts of $792.2 million. DreamWorks ranks seventh with $499 million and has slumped after films such as "Red Eye" and "The Island."
NBC Universal, a unit of General Electric Co., ended discussions with DreamWorks earlier this year over price. Talks resumed in October. NBC Universal wanted to reduce the price by 10 percent, to $900 million, after the DreamWorks flops.