China set to clear Tencent’s $3.5 bn Sogou deal subject to data security conditions

China’s antitrust regulator is ready to clear tech giant Tencent Holdings Ltd’s plan to take the country’s no.3 search engine Sogou private, three people with knowledge of the matter told Reuters, a move that signals the watchdog is willing to wave some deals through even as it ratchets up sector scrutiny.

The regulator, State Administration of Market Regulation (SAMR), has no objection to the $3.5 billion deal for the 60 per cent of US-listed Sogou that Tencent doesn’t already own, the people said, as long as Tencent is willing to set up a special mechanism to ensure data security – a first for SAMR deal approvals.

Shares of Sogou were up 5.8 per cent in premarket trading on Friday.