Both firms stressed that no agreement had been reached and there was no certainty that the discussions would lead to a transaction
Pfizer has confirmed that it is in 'preliminary friendly discussions' with Dublin-based Allergan in relation to a potential merger of the two companies. But the US drugmaker would not comment on speculation regarding the terms of a potential deal.
Both firms stressed that no agreement had been reached and there was 'no certainty that these discussions will lead to a transaction'.
The talks were reported in today's Financial Times, which suggested that a transaction would enable Pfizer to reduce its tax bill.
Last year Pfizer made a £69bn offer to buy UK drugs group AstraZeneca, but AstraZeneca turned down the offer arguing that it undervalued the company.
If that deal had gone through, Pfizer planned for the new company to have had its headquarters in New York, but to be based in the UK for tax reasons.