Chinese textile company Shandong Ruyi is planning to become the top shareholder of struggling Japanese apparel maker Renown Inc., reports said Sunday.

Shandong Ruyi will acquire a stake of about 40 percent in Renown, investing about 4 billion yen ($43 million) and becoming Renown's leading shareholder through a third-party allocation of shares, the Nikkei business daily reported, without disclosing sources.

Once the deal is completed, Renown will become the largest Japanese company to be absorbed by a Chinese firm, the Nikkei said. Renown, one of Japan's top apparel makers, had group sales of 129 billion yen ($1.43 billion) in the last financial year to February.

In a similar report, the Asahi Shimbun said Shandong Ruyi would acquire about one third of Renown shares.

Renown has struggled amid the economic downturn. It booked a net loss of 10.9 billion yen ($121.08 million) in the financial year to February, due to sluggish department store sales amid severe competition with discount stores.

Cases of Chinese firms acquiring Japanese firms are increasing. In 2009, Chinese retail chain Suning Appliance Co bought a stake in Japanese consumer electronics retailer Laox for 800 million yen ($8.4 million), making it Laox's largest shareholder.