Bollywood Billionaire Funds New Spielberg Studio

Steven Spielberg, one of Hollywood's most powerful directors, is to recreate his independent film studio after joining hands with the Indian media mogul Anil Ambani.

The deal will see Ambani, ranked the world's sixth richest man by Forbes magazine with a fortune of $42bn (£23bn), back Spielberg's studio with $550m of equity investment from his Mumbai-based company Reliance Big Entertainment. Another $750m will be raised in debt.

Spielberg, the winner of three Oscars, has produced some of Hollywood's most memorable films, including Schindler's List, Jurassic Park and ET. However, the director has been unhappy at Viacom, the US media house that bought Spielberg's DreamWorks company for $1.6bn in 2006, reportedly clashing with management.

Despite the apparent rift, Spielberg's division produced big hits for Viacom. DreamWorks made last year's summer smash movie Transformers, the third highest-grossing movie in North America, pulling in almost $320m.

Bollywood's Reliance Big Entertainment has pursued openings in Hollywood for months. Ambani, 49, has been quick to build an entertainment empire that spans radio, magazines, mobile phones and cinema in India after an acrimonious parting with his elder brother in 2006. Last month, Ambani denied he was in the race to buy Newcastle United football club.

In May, Reliance announced at the Cannes film festival that it was looking to put $1bn into eight Hollywood-based production companies owned by celebrities including George Clooney, Nicolas Cage, Tom Hanks and Brad Pitt.

Reliance, which is also picking up cinema chains in the US, is attempting to build a global movie company. "The venture will reflect the new reality in today's world of cinema, where box-office collections for Hollywood movies are much larger outside than in the US," a source was quoted as saying in the Indian press.

The new Bollywood-backed DreamWorks is likely to begin work in January and is set to produce six films a year.

Although no formal announcement has been made, Paramount Pictures, Viacom's Hollywood arm, let the deal slip when it publicly congratulated DreamWorks' founding trio - Steven Spielberg, David Geffen and Stacey Snider - on completing a deal to leave the studio.

It remains unclear what will happen to Spielberg's planned next movie, Tintin.