Two of the unlikeliest dance partners - US rivals Artisan Entertainment and Miramax Films - are teaming up to co-produce and co-finance Dirty Dancing 2, the sequel to one of the most successful independent films of all time.

The film will be a 50/50 worldwide joint venture and Artisan will handle domestic distributon. Miramax's studio sister distributor Buena Vista International (BVI) will release the film in all foreign territories.

The announcement was made by Artisan's co-CEO Amir Malin and Miramax co-chairmen Harvey and Bob Weinstein.

Dirty Dancing 2 will move the action of the original, which grossed $63.4m domestically through Vestron Pictures and over $150m internationally in 1987, from the Catskills to South Beach, Miami - giving the new film a contemporary edge with a Latin twist and providing the potential for a Latin-influenced soundtrack.

The alliance between Artisan and Miramax arose out of a lunch between Malin and Harvey Weinstein last December. "We were sitting around and going over different projects which we could do together," said Malin yesterday, "and this film came up. We knew that between the two of us we could maximise the revenues from this film and create a franchise. It's a very big production." By the end of the lunch, the two had agreed to develop, produce, finance and distribute the film together.

Dirty Dancing is one of the key titles in Artisan's 6,700-title library and has been a major video and DVD hit for the company.

The deal was negotiated between Artisan's senior vice president Patrick Gunn and vice president, legal and business affairs Erin Austin with Miramax's executive vice president Charles Layton and senior vice president of business affairs Michael Luisi.