Energy-to-construction conglomerate GS Group said Thursday it has signed an agreement with South Korea's top steel maker Posco to establish a joint venture for battery recycling business to create synergy in the rapidly expanding industry.

Named Posco-GS Eco Materials, the joint venture will be 51 percent owned by Posco Holdings and 49 percent owned by GS Energy. It will be established within this year.

Posco and GS said they saw new business opportunity amid shifting industry ecosystem and decided to join efforts to create synergy in the battery recycling business by investing some 170 billion won ($121 million).

Such agreement comes after Posco and GS held the top management meeting in September last year to discuss and share insights in battery recycling, which is both group’s core business.

Firms said after starting off with extracting materials from used battery for recycling, they would later expand the business to Battery as a Service (BaaS) format to also conduct battery evaluation and inspection for reuse.

“We expect to make synergy with GS Group for stable securing of used battery as well as creating a new ecosystem for battery recycling business,” said Posco Group Chairman Choi Jung-woo.

“When two group’s business potentials are combined, we are sure that we can create new business opportunity and will respond well to an energy transition,” said GS Group Chairman Huh Tae-soo.