BEIJING—Chinese antitrust authorities approved Foxconn Technology Group 2354 -0.50 % ’s deal to buy troubled Sharp Corp. SHCAY 22.29 % , clearing the final hurdle to one of the biggest takeovers of a Japanese electronics company by a foreign firm.
The news on Thursday came as Apple Inc. assembler Foxconn, formally known as Hon Hai Precision Industry Co. 2317 -0.56 % , reported a 31% decline in second-quarter net profit as iPhone sales fell in a maturing smartphone market.
Under the terms of the takeover, announced in March, Taiwan-based Foxconn is to pay 388.8 billion yen ($ 3.8 billion) for about two-thirds of Sharp.
Foxconn was interested in Sharp partly because of the Japanese company’s business in making screens for smartphones. Sharp is also a supplier of screens used in Apple’s iPhones.
Foxconn said net profit for the three months ended June 30 fell to 17.7 billion New Taiwan dollars (US$ 566 million) from NT$ 25.7 billion a year earlier.
Analysts expected a profit of NT$ 23.9 billion, according to an average estimate by Thomson One Analytics.
Consolidated revenue fell 5.2% to NT$ 922 billion from NT$ 972.7 billion a year earlier.
After years of rapid growth, Apple posted a decline in profit in its last two quarterly results, as iPhone sales are crimped by competition from Chinese brands and growing market saturation.
Foxconn’s results didn’t include the Sharp acquisition.
At its annual shareholder meeting in June, Foxconn Chairman Terry Gou said the company faced a tough business environment and was focused on investing in next-generation technologies and streamlining operations at Sharp to make the Japanese firm profitable.
Foxconn isn’t the only Apple supplier that has taken a hit from slowing iPhone sales.
Sharp last month reported a net loss of ¥27.5 billion ($ 266 million) for its fiscal first quarter because of sluggish sales of its display panels.
Earlier this week, Japan Display Inc. 6740 -5.75 % said it lost about $ 115 million in the April-June quarter and turned to its top shareholder, the government-backed Innovation Network Corp. of Japan, for support.