US drugs giant Pfizer has agreed a deal to buy Botox producers, Allergan for $160bn (£106bn), making this the biggest pharmaceuticals deal in history.

The merger will create the world’s biggest drugmaker, to be called Pfizer.

Allergan shareholders will receive 11.3 shares in the merged company for each of their Allergan
shares.

Analysts have suggested the deal will allow Pfizer to escape relatively high US corporate tax rates by moving its headquarters to Dublin.

Last year, Pfizer made an offer to buy UK drugs group AstraZeneca, which rejected the offer, arguing it undervalued the company.

Pfizer boss Ian Read will be chief executive and chairman of the merged company, with Allergan
boss Brent Saunders becoming president and chief operating officer.

“The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical
company with the strength to research, discover and deliver more medicines and more therapies to
more people around the world,” said Mr Read.

A finalised deal would be the latest in a series of mergers and acquisitions in the sector, as
pharmaceuticals companies struggle to cope with patents on a number of major drugs expiring, while a better understanding of genetics and disease has led to more targeted medicines with a smaller market.