The Pfizer-Allergan mega-merger was officially called off on Wednesday after new rules from the Treasury Department meant to stifle tax inversion deals stymied several months of planning.
Both Pfizer and Allergan stressed that calling off the deal, announced last November, was a mutual decision. Pfizer had been criticized in the media for the merger, which would have allowed the New York-based company to move its tax headquarters to Ireland to save money. Pfizer will also pay Allergan $150 million to reimburse its deal-related expenses.
"Pfizer approached this transaction from a position of strength and viewed the potential combination as an accelerator of existing strategies," said Ian Read, chairman and CEO of Pfizer, in the statement.
The $160 billion merger was halted by new regulations meant to block tax inversions – the practice of moving oversees to pay lower taxes. Pfizer’s move would have significantly lowered its taxes, and it drew criticism from politicians.
Allergan CEO Brent Saunders said in a statement that he was disappointed the deal had ended. In an interview on CNBC, Saunders said that the new Treasury rules appeared to be "designed very specifically to target this deal."
The deal created uncertainty for the agencies that work with Pfizer and Allergan, which were unsure how the merger would affect their work with the companies.