Pfizer and Allergan scrap plans for merger

Pfizer and Allergan have announced the termination of their planned merger deal by mutual agreement.

The $160 billion (113.77 billion pounds) combination, which was announced last November, was set to be the biggest in pharmaceutical industry history, but has been aborted due to US tax law changes that would have undermined the intended benefits of the deal.

Pfizer has agreed to pay Allergan $150 million for reimbursement of expenses associated with the transaction, with both companies now pledging to return their focus to the growth of their standalone businesses.

Following the termination of the deal, Pfizer will make a decision on potential separation of a number of its innovative and established businesses before the year's end, while Allergan will proceed with the $40.5 billion sale of its Actavis generics business to Teva.

Ian Read, chairman and chief executive officer of Pfizer, said: "We remain focused on continuing to enhance the value of our innovative and established businesses."

Meanwhile, Brent Saunders, chief executive and president of Allergan, said: "While we are disappointed that the Pfizer transaction will no longer move forward, Allergan is poised to deliver strong, sustainable growth."