Botox-maker Allergan confirms Pfizer takeover approach

Botox-maker Allergan has confirmed it has held preliminary talks about a takeover by drugs giant Pfizer.

Dublin-based Allergan said no agreement had been reached and there was "no certainty that these discussions will lead to a transaction".

Allergan shares were up more than 6% in afternoon trading in New York.

Analysts said Pfizer needed to boost profits and may be looking to escape relatively high US corporate tax rates by moving its headquarters to Dublin.

"Allergan today confirmed that it has been approached by Pfizer Inc. and is in preliminary friendly discussions regarding a potential business combination transaction," the company said in a statement.

"The company will not comment on speculation regarding the terms of a potential transaction."

The talks were first reported in the media late on Wednesday.

"Pfizer desperately needs a large acquisition and the resulting synergies to reinvigorate its tepid earnings growth rate," said Maxim Jacobs at Edison Investment Research.

"Also, Allergan would help Pfizer escape the uncompetitive US corporate tax rate, which has led company after company to domicile away from its shores."

Last year, Pfizer made an offer to buy UK drugs group AstraZeneca, but Astra rejected the offer, arguing it undervalued the company.