Hahn & Co., the nation's largest private equity firm in terms of assets under management, is to set up a joint venture with Kolon Industries, a chemical and textile manufacturing unit under Kolon Group, to bolster its industrial film business.

The two entities have signed a binding memorandum of understanding to cooperate for the launch of the joint venture, according to a disclosure filed by Kolon Industries Tuesday.

“The related parties are discussing the details. An announcement will be made when further details are confirmed, or in around three months,” the disclosure read.

Hahn & Co. acquired the industrial film business of SK Group affiliate SKC in a deal worth 1.6 trillion won ($1.2 billion) in 2022 and changed its name to SK microworks, seeing potential as its products are widely used in advanced technologies for the display, mobile and semiconductor sectors.

Kolon Industries initially considered selling off its film business unit due to low earnings. Its film and electro-materials business recorded a 17.7 billion won deficit in the third quarter of last year.

If the joint venture is established, Hahn & Co.'s SK microworks is likely to take control. The venture will focus on strengthening the competitiveness of industrial film products while more low-priced Chinese products are taking global market share.