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Why DreamWorks Is Tapping Bollywood

BusinessWeek, Thursday, June 19, 2008 10:45 AM

India's Reliance Big Entertainment is in talks with DreamWorks SKG to spin off a new movie joint enterprise. For $500 million to $600 million, Reliance will get a stake in the Hollywood company and a pact allowing it to make movies with DreamWorks.

The deal is part of a Bollywood trend. In the past 18 months, Walt Disney, Sony Pictures and Paramount have signed contracts with Indian entertainment companies. Last month, a division of Reliance made deals to produce and develop movies with Tom Hanks, George Clooney, Nicolas Cage and Brad Pitt.

Bankers in India say funding for the DreamWorks deal will largely be private equity. "If you have global ambitions, then Hollywood is the starting point," says Rajesh Sawhney, Reliance president.

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