Paramount and DreamWorks announced a separation agreement this afternoon that wraps up their nasty relationship. Of course, this is Hollywood baby, so both sides are expected to remain friends - sort of. As part of the deal, the companies will be partners on 30-40 of the 200 projects that DreamWorks has in development. Of those, DreamWorks takes the lead in developing 15-20 (Paramount will have the option to co-finance and co-distribute). THR says that the list includes several Spielberg projects, such as "Lincoln," "Trial of the Chicago Seven" and "The 39 Clues." Spielberg and co-chairman/CEO Stacey Snider are in the process of forming a new company, with equity from India's Reliance BIG Entertainment (plus $700 million that JPMorgan Chase & Co. is putting together). Perhaps the biggest news is that this pretty much does it for David Geffen and DreamWorks. He will not be part of the new company.

Although Hollywood's chattering class had predicted that dividing up the project stockpile would lead to prolonged and contentious negotiations, the actual resolution came relatively swiftly once the DreanWorks principals announced their departure. During the past two weeks, Viacom's general counsel Michael Fricklas and Paramount vice chairman Rob Moore worked out the details with DreamWorks founder David Geffen and attorney Skip Brittenham, with a final sign-off coming Friday night. The settlement jumpstarts the new DreamWorks' production efforts, while also assuring that Spielberg retains a number which he didn't want to surrender. It also keeps product flowing through Paramount's distribution pipeline and enables the studio to call upon Spielberg's services on select titles.