The Swatch Group and Tiffany & Co. have formed a watch company to “further the development, production, and worldwide distribution of Tiffany brand watches.” The 20-year strategic alliance (renewable for another 10), in talks for over a year, was announced in December.

This is “a path-breaking strategic move,” said Nicolas G. Hayek Sr., Swatch Group chairman and cofounder. “It allows, without any financial capital transaction, the maximum utilization of manufacturing and distribution resources of both partners.”

“The Swatch Group is the best conceivable strategic partner for Tiffany’s long-planned reentry into watch distribution,” said Michael J. Kowalski, Tiffany chairman and chief executive officer. “It’s the leader in the high-end watch business with unparalleled distribution capabilities and experience in the luxury segment of the watch business.”

Nicolas Hayek Jr., CEO and president of the management board, said the two will collaborate on design, engineering, manufacturing, marketing, distribution, and service. “We fully expect to see Tiffany & Co. strengthen its position among the best known and most respected watch brands worldwide,” he said.

The new watchmaking company will be in Switzerland, wholly owned by the group, and authorized to use Tiffany’s trademarks and name. Tiffany will participate in its before-tax profits and have a seat on its five-member board of directors and seats on its product design and marketing committees.

Timepieces will include both new designs and those for which Tiffany is noted and will be distributed through the Swatch Group network and Tiffany stores. Swatch Group affiliates will be entitled to establish and run Tiffany & Co. watch stores outside the United States. The new company will support distribution with significant marketing, that’s “fully integrated [with Tiffany advertising] and support a common objective,” said Kowalski.