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Paramount Pictures Buys Part of DreamWorks

Paramount Pictures says it has agreed to buy DreamWorks SKG, the movie studio co-founded by film director Steven Spielberg.

Paramount plans to pay $1.6 billion in cash and debt for the live action portion of DreamWorks. The deal does not include DreamWorks animation, the most profitable part of the company.

Paramount will get DreamWorks' library of 59 films, including Gladiator and American Beauty, as well as a production partnership with Mr. Spielberg.

The sale marks the end of the dream of DreamWorks' founders, Mr. Spielberg, record mogul David Geffen and animator Jeffrey Katzenberg, who had hoped to develop a company that included television, music, films and the Internet.

Paramount is part of the huge media conglomerate, Viacom.