Ireland-based Allergan on Thursday confirmed that it has been approached by Pfizer and is in talks regarding a potential deal with the U.S. drug company, raising questions about another pharmaceutical tax inversion.
Allergan said no agreement had been reached, describing the talks as "preliminary and friendly."
Shares of Allergan popped about 8 percent in early morning trade. Pfizer stock began to trade higher, before falling about 2 percent. Both stocks were initially halted immediately after the news.
"Under any potential scenario with Pfizer, Allergan remains strongly committed to complete the proposed divestment of its global generics business to Teva Pharmaceutical Industries and expects the generics divestiture transaction to close in the first quarter of 2016," the statement said.
Allergan said it would make another announcement "when appropriate."
Pfizer also confirmed the talks in a statement released on Thursday. "Pfizer will not comment on speculation regarding the terms of a potential transaction," the company said.
The two companies are the latest pharmaceutical companies to start early dealmaking talks. Such a deal could mark the zenith of the industry's megamerger trend.