paidContent - Anil Ambani Acquires 50% In Spielberg's DreamWorks For $325 Million
This story was written by Sruthijith KK.
Deepening his financial stake in Hollywood, Billionaire Anil Dhirubhai Ambani has picked up a 50% stake in Steven Spielberg’s Dreamworks SKG for $325 million. The investment is part of an $825 million first round of funding for Dreamworks, which will now make five or six movies a year.
Ambani’s interest in Dreamworks was first reported last June, but neither he nor his company Reliance Big Entertainment has addressed it publicly in any depth until now. RBE Chairman Amit Khanna told contentSutra today that “we will participate in future rounds of fundraising in the same debt-equity proportion as and when funds are needed for film projects.” “This is a game changer, thrusting India to the center of global film industry. And with this, we become the first transnational entertainment company out of India,” he said. Apart from Ambani’s $325 million, Disney (NYSE: DIS) has invested $150 million in the distribution rights for all movies; the rest will be debt from a syndication of banks. Khanna said the first film under the deal will be ready by the summer of 2010.
RBE clearly wants to be a presence in Hollywood. In addition to the Dreamworks deal, it has also invested in some 10 other U.S. movie-production houses, including those of actors George Clooney, Jim Carrey and Brad Pitt, to the tune a total of between $500 million and $1 billion.
Dreamworks is the studio behind such films as Shrek, Transformers, Saving Private Ryan, Over The Hedge and Kung Fu Panda. Disney will distribute the films outside India, while RBE will distribute the films in India.
Reliance Anil Dhirubhai Ambani Group, the parent of RBE, is among India’s major business houses with interests in telecom, financial services and entertainment. The Wall Street Journal first reported in June last year that Anil Ambani was in talks with the celebrated director to provide him with enough cash to end Dreamworks’ relationship with erstwhile owner Paramount Pictures (a Viacom (NYSE: VIA) unit). In September, The Times of India reported that the two sides were signing a $1.5 billion deal that would make Anil Ambani the single largest shareholder in the prestigious Hollywood studio, with Spielberg and Dreamworks CEO Stacey Snider (who formerly headed Universal Studios) together holding an equal share.
There were also reports last year that George Soros planned to buy a 3% stake in RBE. Khanna told contentSutra that the deal has not yet been closed. “We are close to Mr. Soros, and we talk often, but due to various ongoing issues, we haven’t yet closed that deal,” he said.
By Sruthijith KK