Steven Spielberg, Jeffrey Katzenberg and David Geffen apparently have a price. And it's about $1.6 billion.

DreamWorks SKG, the movie, television and music empire conceived by those Hollywood moguls 11 years ago, has been sold to Paramount Pictures for the whopping sum. According to the announcement released from both studios, Paramount will cough up around $775 million in cash and will assume $825 million in debt and other obligations.

The deal was brokered in about a week, undermining a year of talks between DreamWorks and longtime distribution partner NBC Universal.

In statements, the trio says they are thrilled with the deal.

Spielberg calls it "an exciting opportunity for each of us to embark on a new adventure together." Katzenberg says he is "excited about the benefits and new opportunities that the Paramount partnership." And Geffen says he is "excited and energized to be in business with them and look forward to a successful new partnership."

The purchase includes all of DreamWorks' current projects in development, including the upcoming Dreamgirls with Eddie Murphy, Beyonc? Knowles and Jamie Foxx, and an ongoing production partnership with Spielberg and Geffen.

Geffen will become chairman of Paramount's DreamWorks division, which will crank out four to six movies a year. While Spielberg would be free to make movies for any studio, Paramount would automatically co-own any film he directed or produced.

Geffen said the company will likely retain its production offices, which are based at Universal. Spielberg, who has maintained a long association with Universal, says in a statement that he is "saddened" that the General Electrics-owned studio was unable to reach terms for DreamWorks.

Katzenberg, meantime, will remain CEO of DreamWorks Animation, which was spun off into a public company last year and is not part of the Paramount acquisition. (The company's third pillar, DreamWorks Music, was sold off in 2003 to Universal Music for $100 million.)

However, per a separate seven-year deal also announced Sunday, Paramount now has dibs on distributing all DreamWorks' 'toons beginning with 2006's Over the Hedge and including the next two Shrek sequels. Paramount and its corporate sibling Nickelodeon also have rights to develop DreamWorks Animation characters for TV, with Shrek and Madagascar adaptations among the first small-screen projects on the drawing board.

Additionally, Paramount will be the exclusive, worldwide purveyor of DreamWorks' live-action home video library and DreamWorks' television division, which includes NBC's Las Vegas and the in-syndication Spin City.

"With the incredible talents of Steven Spielberg, Hollywood's most gifted and respected director and producer, and David Geffen, the most creative mind in show business, Paramount will be able to significantly enhance its pipeline of groundbreaking motion pictures," Brad Grey, chairman and CEO of Paramount Pictures, said in a statement.

The DreamWorks deal is the biggest yet for Grey, who has been trying to transform Paramount back into a powerhouse since taking the reins in January. And DreamWorks, hampered by its relatively small size and limited production slate, has had cash-flow problems since its inception more than a decade ago.

To help pay for the mega-deal, Paramount plans to raise about $1 billion by selling off DreamWorks's live-action film library, which includes Oscar winners Gladiator, American Beauty and Saving Private Ryan, the summer smash War of the Worlds and the upcoming Munich.

"This is a major milestone in our efforts to reestablish Paramount as an industry leader and fuels the momentum for their emergence as a real global film company," says Tom Freston, copresident and co-CEO of Paramount's corporate parent, Viacom. "Overnight, this makes Paramount a key contributor to new Viacom's revenue and earnings growth story."