Indian communications giant Reliance ADA Group has reportedly cobbled together a deal to acquire DreamWorks for $1.2 billion, allowing studio principals Steven Spielberg and David Geffen to part ways with Paramount Pictures.

The deal gives Spielberg and DreamWorks Chief Executive Stacey Snider the financial support they need to leave Viacom Inc.'s Paramount and start a new movie making venture, the Wall Street Journal reported. Geffen is not expected to be part of the venture.

Under the signed agreement, Mumbai-based Reliance will invest $500 million equity and provide another $700 million in debt toward the new venture that was put together with J.P. Morgan Chase & Co. The venture will produce a slate of about six films a year, the Journal said.

Paramount issued a statement after the Wall Street Journal broke the news earlier today saying it was not opposing the deal.

"To facilitate a timely and smooth transition, Paramount has waived certain provisions from the original deal to clear the way for the DreamWorks principals and their employees to join their new company without delay," the statement said.

Talks between the DreamWorks principals and Reliance first began during the summer and those close to the deal have been saying it was imminent for the past several weeks.

The agreeement comes at a time when the tight credit market is crimping production. Recently, Spielberg and "Lord of the Rings" director Peter Jackson were turned down by Paramount for funding to make their film "Tintin." Paramount also turned down the duo's request for funding.

By putting up the money for DreamWorks, Reliance is hoping to build a global media brand.

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