NEW YORK (REUTERS, BLOOMBERG) - Pfizer Inc and Allergan Plc are considering a combination, media reports said setting the stage for what could be one of the largest deals in the drug industry's history.

Pfizer recently approached Botox-maker Allergan and the process is at an early stage, the Wall Street Journal said, citing people familiar with the matter. Though details of the talks are unclear, they could face obstacles such as agreeing on price, layoffs and closing of facilities, the Journal said.

With markets caps of US$113 billion (S$158.5 billion) and US$219 billion respectively, Ireland-based Allergan and US-based Pfizer combined would be worth at least US$332 billion, CNBC said.

The largest ever deal in the drug industry was Pfizer's US$116 billion acquisition of Warner-Lambert Co. in 2000, data compiled by Bloomberg show.

S&P 500 companies that have greater market caps include Apple, Microsoft, ExxonMobil and Google parent Alphabet (class A and class C combined).

The global healthcare sector has seen an unprecedented wave of deals since early 2014, from large drugmakers buying up smaller rivals, to consolidation among makers of generic medicines and tie-ups between insurers.

This year has seen more than US$200 billion in transactions announced. That includes Pfizer's US$17 billion deal for injectable drug maker Hospira Inc.

Pfizer has sought deals in recent years as patents have expired for key drugs, including cholesterol-lowering medicine Lipitor.

Allergan became the third-largest generic drugmaker in the United States after combining with Actavis in March. It has accounted for about US$131 billion in deals over the past two years.

An acquisition of Allergan, which has its legal domicile in Dublin, may also let Pfizer relocate outside the US for tax purposes. That was one of the reasons Pfizer sought to acquire AstraZeneca last year before eventually withdrawing its proposal. Pfizer looked at Actavis as a potential acquisition, people familiar with the matter said last year.