The companies are not expected to announce a deal on Monday, as has been rumored. Instead, the announcement is expected to come the following Monday after the Thanksgiving Day holiday.
It is expected to be an all-stock deal of a little more than 11 shares of Pfizer for each share of Allergan.
The companies are awaiting guidance from the Treasury Department before moving forward with a deal, sourced said.
—CNBC's David Faber contributed to this report.