Japanese trading house Itochu Corp said on Wednesday it will acquire 30 percent of Shandong Ruyi Group for roughly 15 billion yen ($200 million) , as it looks to expand in China's clothing sector.
The agreement will make Itochu the second largest shareholder in the Chinese apparel company.
Itochu, which already runs textile operations in Japan, Hong Kong and China and owns factories throughout Asia, said it plans to expand trading of wool and other materials with Shandong Ruyi and double Shandong Ruyi sales compared with its 2011 target to 400 billion yen.
Itochu's shares were up 1.6 percent in early morning trade, outperforming a 0.2 percent decline in the benchmark Nikkei .
The October stake sale would also give Itochu an indirect stake of about 12 percent in Japan's Renown Inc , in which Shandong Ruyi has a 41 percent stake.
Itochu will send two directors and sales personnel to the Chinese firm, while aiming to make the company an equity-method affiliate, the Nikkei business daily said earlier.
($1 = 76.735 Japanese Yen)