Entertainment giant VIACOM has taken over the DREAMWORKS SKG studio in a deal worth $1.6 billion (GBP914 million).

Dreamworks was set up in 1994 by Oscar-winning director Steven Spielberg, record company boss David Geffen and producer JEFFREY KATZENBERG - and Viacom will now take on Spielberg's creative output.

Viacom, which owns Hollywood giant Paramount Pictures, will also take over Dreamworks' debts and back catalogue of movies, including Saving Private Ryan and American Beauty.

The deal does not cover Dreamworks' animation studios - which created the Shrek movies - but it does give Viacom the right to distribute already-made animated Dreamworks films.