Steven Spielberg and David Geffen may announce as soon as this week a deal with Reliance ADA Group to set up a new studio and split from Paramount Pictures, sources familiar with the deal told Reuters on Sunday.

However, the DreamWorks team has not ruled out Paramount as their distributor, the sources told Reuters.

The impending union between Mumbai-based Reliance and Spielberg's DreamWorks team caps two years of speculation and feuding between Spielberg, his DreamWorks co-founder Geffen and the brass of Viacom Inc's Paramount since the sale of DreamWorks to Viacom for $1.6 billion in 2006.

Under the deal, first reported in June but now on the verge of completion, Mumbai-based Reliance would invest about $500 million in equity. J.P. Morgan Chase & Co has offered to provide debt to DreamWorks, which had sought an additional $500 million in financing, a source close to the deal told Reuters.

Click here for the Reuters report.