PHILADELPHIA (AP) _ Societe Nationale Elf Aquitaine has reached an agreement with the Federal Trade Commission that allows the French oil and chemical company to proceed with its $1.05 billion takeover of Pennwalt Corp.

The FTC withdrew its objection to the $132-a-share deal Monday after Elf Aquitaine agreed to sell a Pennwalt chemical plant in Thorofare, N.J., thereby ending antitrust concerns.

The government was worried about the companies' combined share of the market in two major chemicals.

Elf Aquitaine's offer, which had been scheduled to expire today, was extended to 5 p.m. EDT Thursday. The companies said about 4.7 million of Pennwalt's 7.9 million outstanding shares had been tendered as of the close of business Friday.

Pennwalt stock shot up after Monday's announcement, closing up $4.62 to $131.62 1/2 on the New York Stock Exchange.

The FTC earlier had authorized its staff to seek a court order blocking the merger because it ''could substantially reduce competition in the production and sale'' of two fluorochemical products, polyvinylidene fluoride and vinylidene fluoride.

Pennwalt is the largest U.S. and worldwide seller of polyvinylidene fluoride while Elf Aquitaine's chemical subsidiary, Atochem, is third in both, the FTC said. Pennwalt and Elf Aquitaine are the only suppliers of vinylidene fluoride in the United States, the FTC said.

Uses for polyvinylidene fluoride, sold by Pennwalt as Kynar plastic resin, include coating electrical wires and lining pipes in chemical plants. Vinylidene fluoride is a building block for polyvinylidene fluoride.

Pennwalt will sell its New Jersey plant but keep its plant at Calvert City, Ky., where the bulk of its fluorochemical manufacturing operations are based, the companies said.

Sale of the New Jersey plant, which employs 66 people, will be completed after the FTC agreement is finalized, Pennwalt spokeswoman Sue Kinard Brown said. She said she could not comment on whether a buyer had been found.

Under the agreement with the FTC Elf Aquitaine must sell the Pennwalt plant within 14 months. The company also is required to receive FTC approve before acquiring any interest in a company that manufactures or sells either chemical in the United States over the next 10 years.

Pennwalt, a Philadelphia-based chemical company, agreed in March to the buyout by Elf Aquitaine after spurning a hostile takeover bid by Centaur Partners, a New York investment group.

The deal would retain Pennwalt's name and keep its headquarters in Philadelphia.

Founded in 1850 as Pennsylvania Salt Manufacturing Co., Pennwalt has sales of about $1 billion a year.

Elf Aquitaine, a French government-controlled oil and chemical concern, has more than $20 billion in annual sales with more than a third related to chemicals.