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Well, now it looks like Paramount wasn't just fucking around when it prepared its bid for DreamWorks. The Wall Street Journal is reporting that Steven Spielberg is jilting Universal and dashing into Brad Grey's outstretched arms:

Viacom Inc.'s Paramount Pictures has forged a deal to acquire DreamWorks SKG after the live-action movie company ended negotiations with rival bidder General Electric Co., according to people familiar with the situation.


DreamWorks executives have informed officials at NBC Universal that they will not pursue that studio's bid, the people said.

DreamWorks has been in on-and-off talks with Universal for several months, but of late the two sides have faced disagreements on various issues.

Paramount made a bid after winning approval from the board of its parent company, Viacom, to make an offer for DreamWorks.

Our sources on the Paramount lot have been buzzing about this all afternoon, panicked that the deal was imminent and that layoffs were on the way. On the bright side, DVDs from the DreamWorks library should soon be available for a mere $4 to the Paramount employees who keep their jobs.

UPDATE: The NY Times says the deal is for $1.6 billion.