NEW YORK (BLOOMBERG) - Pfizer Inc. and Allergan Plc said they would combine operations in a stock transaction worth about US$160 billion (S$225 billion), creating a drugmaking behemoth with products from Viagra to Botox and a low-cost tax base.

Allergan will be valued at US$363.63 a share in the transaction, the companies said in a statement on Monday. That represents a premium of more than 30 per cent.

Pfizer, based in New York, makes medications including Viagra, pain drug Lyrica and the Prevnar pneumococcal vaccine, and Allergan produces Botox and the Alzheimer's drug Namenda. Together, barring any divestitures, the companies would be the biggest pharmaceutical company by annual sales, with about US$60 billion.

The deal is unprecedented on many levels. It's the largest acquisition so far this year. It's the largest ever in the pharmaceutical world, eclipsing Pfizer's purchase of Warner- Lambert Co. in 2000 for US$116 billion. And if the new company is able to establish itself abroad for a lower tax rate, a controversial process called an inversion, it will be the largest such move in history.

Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share for each that they hold.