Pfizer was due to secure formal board approval on Sunday for its acquisition of Botox maker Allergan for more than $150 billion, making it the healthcare sector's largest deal ever, according to people familiar with the matter.

The agreement is set to draw political ire in a US presidential election year for Pfizer's decision to use the transaction to redomicile in Ireland, where Allergan is registered, in a so-called "inversion," thereby reducing its corporate tax rate.

It will also reignite debate in the pharmaceutical industry over the role of research and development, with Allergan chief executive Brent Saunders, a prolific dealmaker and a skeptic of in-house drug discovery, joining the combined company in a position to influence its strategy.

The deal would involve Pfizer paying with 11.3 of its shares for each Allergan share, the people said. There will also be a small cash component, accounting for less than 10 per cent of the value of the deal, the people said.

Pfizer's chief executive Ian Read, aged 62, will be CEO of the combined company, with Allergan's CEO Brent Saunders, 45, serving in a very senior role focused on operations and the integration, the people added.

Saunders will also have a seat on the combined company's board, one of the people said.

The sources asked not to be identified because the terms of the deal are not yet public. Pfizer and Allergan declined to comment.

Widely used Pfizer drugs such as Lipitor, Viagra and nerve pain treatment Lyrica would be brought together with Allergan's Botox, Namenda memory loss treatment, Restasis dry eye medication and other leading eye-care brands.

It would be the biggest merger of the year, topping beer maker Anheuser-Busch InBev's proposed $107 billion takeover of SABMiller. And it would realize Read's longtime ambition of an "inversion" deal that would get Pfizer out from under the 35 per cent US corporate tax rate, among the world's highest. The tax rate in Ireland is 12.5 per cent.

The US Treasury last year, and again last week, updated its rules on inversions to make it harder for companies to avoid US taxes by moving overseas. But experts have said these moves would do little to prevent Pfizer from inverting. – Reuters