Zee Telefilms , India's largest media firm, and AOL Time Warner offshoot Turner International (India) Private Ltd, have agreed the establishment of a joint venture outfit that will distribute Zee's channels abroad and AOL's in India.

The deal sees Zee hold 74% of the new Delhi-based company, Zee Turner Private Ltd. And although Zee boss Subhash Chandra formally denied that he had sold any part of Zee Telefilms to AOL Time Warner, many local observers believe that the joint venture is likely to be followed by further reaching co-operation.

The venture foresees a number of initiatives in cross-promotions,

programming and distribution arrangements for the two groups' channels. They have also not ruled out distribution of third party channels in India and South Asia.

The board will comprise three directors nominated by Zee and one by Turner. DP Naganand, director of Zee Telefilms and group head, access business for Zee, will be chairman. The joint venture will be managed by a team of Turner and Zee executives. Anshuman Misra will be the managing director in the joint venture (and will continue to head up Turner), with Sunil Khanna as the CEO, Paresh Karia as the chief financial officer and Siddharth Jain as the senior vice president, distribution.

The announcement of the deal follows weeks of speculation about who Zee would pick as a partner, having months ago signalled that it was looking for a partner that would help it grow into international markets.