Dreamworks Animation SKG Inc, producer of hit movies such as Kung Fu Panda, is in talks to set up a joint venture studio in Shanghai as early as January next year to produce animation and design theme parks, Caijing Magazine reported, quoting government sources.

The joint venture, to be established in the first quarter of next year, would be formed by Dreamworks Animation and a consortium of Chinese companies that may include Shanghai Media Group and China Media Capital, Caijing reported.

It said Dreamworks Animation and the consortium would invest a total of $2 billion in the joint venture, Dreamworks East, over the next five years to produce animation for the Chinese market.

Dreamworks East would also be involved in film distribution and theme park design, with a first animated feature release already planned for 2015, Caijing reported.

As it is an important market for us and one in which the DreamWorks Animation brand and products have tremendous value, we continue to explore opportunities in China. Any further speculation is premature, a Dreamworks Animation spokesperson told Reuters.

Shanghai Media Group could not be reached by telephone and did not response to emails seeking comment, while China Media Capital declined to comment.

Caijing reported that Dreamworks Animation Chief Executive Jeffrey Katzenberg was in China earlier this month to discuss the plan with government officials.

(Reporting by Melanie Lee; Editing by Chris Lewis)

China