The government of Abu Dhabi, which is investing $1 billion through 2013 in a media firm that will produce eight feature films a year, expects to clinch deals with media groups over the next month and is eyeing acquisitions.

Speaking by telephone from Los Angeles, Edward Borgerding, chief executive of Imagenation Abu Dhabi and its parent company Abu Dhabi Media Co (ADMC), also told Reuters the new firm aimed to become a global leader in content creation and distribution.

Flush with petrodollars from soaring oil prices, Abu Dhabi has been investing abroad to diversify its economy in businesses ranging from Western banks and stock exchanges to sports clubs.

"This is a strategy playing out across Abu Dhabi to help it emerge on the global economy ... certainly a media company will (do this)," said Borgerding, previously vice president of Walt Disney International (part of Walt Disney Co) in Hong Kong.

The firm, which owns a number of print and broadcast companies, plans to make movies in the emirate starting with family feature "Shorts", to be directed by "Spy Kids" director Robert Rodriguez, starring William H. Macey and currently in post production.

The film is part of a deal signed last year with Warner Bros Entertainment, a unit of Time Warner Inc, the world's largest media company, which included a $500 million joint-venture fund to develop movies.

"Filmmaking is a risky business ... we want a diversified portfolio," Borgerding said, adding the group's future films would include household stars.

Imagenation expects to announce a deal next week and further agreements in October with successful US filmmakers and producers, Borgerding said, declining to identify the firms.

While the group expects to expand organically, acquisitions are also a possibility as it looks to take advantage of the global economic downturn as well as opportunities in emerging film markets such as India and China.

"As a media company, we see lots of deals that come to us ... we are certainly considering possible acquisitions," Borgerding said, adding that there was nothing concrete yet.

Abu Dhabi's latest venture comes hard on the heels of partnerships between neighbouring Dubai and US media companies, although those deals were more skewed to building studios and film theme parks such as $1 billion deal with Marvel Entertainment Inc to showcase fictional superheroes such as Spiderman.

Last week Tatweer, a Dubai leisure developer with assets of $175 billion, told Reuters it is looking to join forces with the likes of Dreamworks Animation SKG Inc to expand outside the Gulf Arab region.

ADMC is also developing films in Arabic, having established Image Arabia for the regional market, but the group is likely to initially get its focus from Hollywood. - Reuters