Paramount Pictures to buy DreamWorks SKG Inc.

[LostInSpace]

LOS ANGELES (Reuters) - Viacom Inc.'s Paramount Pictures said Sunday it has agreed to buy DreamWorks SKG Inc., the movie studio co-founded by director Steven Spielberg, for $1.6 billion, including debt assumption.

The Viacom (Research) unit said the deal gives it DreamWorks' current projects, including Spielberg 's soon-to-be released movie "Munich," a stake in any future films from the iconic director, and worldwide distribution rights for movies from DreamWorks Animation SKG Inc. (Research), maker of computer-animated movies such as smash hit "Shrek."

Paramount further said it is in "advanced discussions" to sell off DreamWorks' 59-title film library shortly after it closes the deal to buy Glendale, Calif.-based DreamWorks.

The deal marks the end of independence for one of Hollywood's major film studios, DreamWorks, which was founded 11 years ago by Spielberg, music mogul David Geffen and movie executive Jeffrey Katzenberg.