Universal Eying DreamWorks Buy?

The financial sector is abuzz with rumors that Universal NBC is exploring the idea of purchasing DreamWorks SKG for a sum that could exceed $1 billion. First reported in the New York Post, the possible merger would see General Electric-owned Universal take control of DreamWorks’s live-action production unit and library.

DreamWorks Animation’s theatrical features would not be affected by a merger since it is now a publicly traded company. However, Universal would get a piece of the toon DVD pie since DreamWorks SKG is involved with distributing DreamWorks Animation products on home video.

Despite lower-than-expected Shrek 2 DVD sales, the ogre remains the studio’s crown jewel as live-action efforts perform below expectations. The success of its Paramount co-production, War of the Worlds, was tempered by the failure of its $120 million Warner Bros. venture, The Island, which opened in fourth place last weekend with just $12 million. The next toon coming down the DreamWorks pipeline is Wallace & Gromit: The Curse of the Were-Rabbit, which opens in October and promises bigger returns than upcoming live-action titles such as Red Eye, Just Like Heaven, The Prize Winner of Defiance Ohio and Chumscrubber.

DreamWorks SKG has not confirmed or denied the possibility of a merger, but issued a statement addressing the New York Post story, which quotes a DreamWorks spokesperson saying the studio is not for sale. The statement issued by the studio reads, "Any comments attributed to a DreamWorks spokesperson in media reports about a potential combination with NBC Universal were not authorized. DreamWorks also said that as a matter of policy, it does not comment on such matters."