DreamWorks has pulled out of$1bn merger talks with NBC Universal as two months of exclusive negotiationsended without a deal this week.
Both parties were optimisticin July when talks got underway for Universal to acquire the studio founded bySteven Spielberg, David Geffen and Jeffrey Katzenberg.
However any eventual dealbetween the parties seems unlikely now after it emerged that Universal chiefsbaulked at the $1bn pricetag and expressed concerns about offering Spielbergthe same kind of filmmaking autonomy he enjoys at DreamWorks.
Universal enjoys a strongrelationship with Spielberg and made his early hits Jaws and E.T.,among others. Spielberg is currently shooting
A deal would have offeredUniversal a chance to bolster its worldwide distribution pipeline as itprepares to scale back its involvement with UIP, the joint internationalreleasing venture it formed with Paramount.
An acquisition would havegiven Universal all of DreamWorks' live action features as well as control of a60-strong library.
DreamWorks Animation would nothave been included because it is a separate public company, however it isunderstood tentative terms would have allowed Universal to distributeDreamWorks' cartoons in theatres.
"We pursued it forquite some time, we were unable to come to terms and we're no longer indiscussions with them," DreamWorks principal David Geffen told reporters.
DreamWorks currentlydistributes its live action features on DVD and internationally throughUniversal.