The agreement comes into effect immediately and the two companies will be sharing space at a number of exhibition including Toy Fair and Spring Fair.
Crafty Kids has had success with the Make & Play puppet line, which now comprises 30 different puppet designs.
Commenting on the agreement, Crafty founder Sally Preisig, said: "The synergy between our companies is so strong with our Crafty Kids product fitting in so well with the eco- friendly positioning of Asobi. This agreement enables me to continue to focus on the creativity while benefiting from the strength of Asobi’s business structure."
Asobi boss, Thierry Bourret, added: "We started 2009 with four brands and we are entering 2010 with 10 and the addition of an established brand like Crafty Kids gives us the critical mass that would otherwise have taken three years to achieve.”