Munich-based Bavaria Media and Italy's Rai Cinema have formed a long-term alliance under which they will develop and co-produce television projects, and eventually theatrical features.

The agreement, which runs until 2003, calls for the two companies to co-produce three television films or mini-series a year, with development costs shared equally by both partners.

Bavaria and Rai will market the projects in their respective territories, but international distribution will be decided on a project-by-project basis. Both companies have international sales arms.

Commenting on the alliance, Bavaria Media's managing director Michael Weber said: "This deal marks a very important step for Bavaria Film Group's European co-production activities and leads the way to a collaboration that promises to be both successful and future oriented."

Rai Cinema's Carlo Macchitella said the two companies would seek projects that "speak to an ever-growing European audience".