UPDATE 1-Tiffany to take $20 mln charge after Swatch deal

(Updates with details on alliance)

NEW YORK, Dec 3 (Reuters) - Tiffany & Co (TIF.N), which announced an alliance with Swatch Group Ltd (UHR.VX) to develop and distribute Tiffany-branded watches, will record $20 million of pretax expenses tied to discontinuing some existing watch collections, the jeweler said in a regulatory filing on Monday.

Tiffany will record the expenses in its fiscal fourth quarter ending Jan. 31, according to the filing with the U.S. Securities and Exchange Commission.

The jeweler announced the deal with Swatch on Sunday, in a joint statement.

The Swiss watch maker will incorporate a new watch-making company that will be authorized to use Tiffany's trademark and operate under the Tiffany name. The new entity will be wholly owned by the Swatch Group but Tiffany will share in its profit and have one seat on its five-member board.

Under the agreement, Swatch will produce existing Tiffany watch designs and add new ones. It will also have the right to establish Tiffany & Co watch stores in certain markets outside the United States. These stores could also sell some Tiffany jewelry, the companies have said.

The initial term of the arrangement is for 20 years, with an option to extend it for another 10 years if certain conditions are met. (Reporting by Aarthi Sivaraman; editing by Maureen Bavdek)