Pathe's UK arm and Sky Pictures, the film production arm of UK satellite broadcaster BSkyB, have signed a production and distribution agreement for up to eight films over the next two years.

The partners will jointly select films, with Pathe handling distribution in the UK, France, Benelux and Switzerland and international sales. The first two films in the deal are Thunderpants, directed by Peter Hewitt and produced by Graham Broadbent, and The One And Only, directed by Simon Cellan Jones and produced by Leslee Udwin.

Pathe was previously a stakeholder in BSkyB, a relationship which spawned a valuable pay-TV output. "As the common goal of both our companies is to make quality films with commercial appeal, this strengthened partnership is a perfect match," said Francois Ivernel, managing director of Pathe's UK operation.

The move comes hard on the heels of a similar partnership between Sky Pictures and Momentum, the UK distribution-production venture backed by Alliance Atlantis.

"This is a powerful European alliance which will allow Sky to co-invest with a first-rate production and distribution entity and co-produce commercially oriented British feature films," said William Turner, head of Sky Pictures.

Mark Sharman, BSkyB's director of broadcasting and production commented: "This new co-investment strategy with Pathe, one of the strongest independent distributors in the UK, is an exciting way forward to raise the profile of Sky Pictures."