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India's Reliance Entertainment and other investors are in talks with Hollywood's DreamWorks SKG to raise up to US$2 billion to create a movie venture, two people familiar with negotiations said yesterday.
DreamWorks, the movie studio founded in 1994 by moguls Steven Spielberg, David Geffen and Jeffrey Katzenberg, is looking to raise a total of US$2 billion ($2.64 billion) from investors - US$1 billion in equity and another US$1 billion for new movie projects, the two people said.
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. It will be some time before the deal is signed, he said.
Reliance Entertainment, part of one of India's top conglomerates, the Reliance ADA Group, plans to invest more than US$500 million to US$600 million in equity, that same person said. The Business Herald reported last week that Reliance was considering an investment of about that size in a deal with DreamWorks.
The Los Angeles Times said last week that DreamWorks was in talks with investors to raise about US$1 billion to break from Viacom and its movie studio, Paramount Pictures, and become an independent studio again.
Viacom bought DreamWorks in 2006 for US$1.6 billion, but the relationship has declined despite 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.
Meanwhile, India's movie industry - often called Bollywood - has expanded as several foreign studios such as Sony, Viacom and Walt Disney have signed co-production deals with Indian movie houses over the last two years.
A deal with DreamWorks would help realise the global ambitions of the Reliance group's chairman, Anil Ambani, one of the world's richest men. The conglomerate has interests in everything from power generation to financial services. It is currently in negotiations to buy MTN Group, South Africa's largest mobile phone network operator.
"It's a powerful mix: a top Indian business house with one of the world's finest film-makers," said Neeraj Roy, managing director of Hungama Mobile, a leading digital entertainment company, referring to Spielberg.
"It makes imminent sense for Hollywood to collaborate with Bollywood because there is capital available in India."
The potential venture with DreamWorks has stirred interest within the Indian industry, with film-makers believing the deal could help India learn how Hollywood does business.
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