Pfizer is in preliminary talks to take over Allergan, according to reports from the Wall Street Journal and Financial Times. The unconfirmed reports follow contact between Pfizer head Ian Read and his counterpart at Allergan, Brent Saunders.

A deal between the two companies would create the world’s largest drugmaker with a market capitalisation in excess of $300 billion, exceeding Johnson & Johnson, currently valued at $277 billion.

According to the Financial Times, buying Allergan, best known as the maker of Botox, would allow Pfizer to complete a long-coveted ‘tax inversion’ that would slash its US corporation tax bill. Allergan, based in Ireland, paid an effective tax rate of 4.8 percent last year versus Pfizer’s 25.5 percent.

A Pfizer adviser recently told the FT that Mr Read believed a takeover of Allergan — which is still perceived as an American company despite its Irish domicile — would prompt less political opprobrium than an acquisition of GlaxoSmithKline, often touted as a potential target.

Last year, Pfizer attempted a $118 billion takeover of UK-based AstraZeneca, only withdrawing in the face of staunch opposition from the AZ’s management, and British politicians and media.

Earlier in the week, Mr Read said he owed it to the company’s investors and employees to secure a lower tax rate. “The employees of Pfizer want a robust, successful company in the future. Their jobs and their careers depend upon it…_To be successful in the future, we need to have a competitive tax rate. So that is why it’s an important issue for us,” he said.

The FT added that investors and analysts have often touted a Pfizer-Allergan deal, with some large shareholders suggesting that Saunders could replace Read, 62, when he retires. Some analysts believe this is the perfect moment for Pfizer to strike a deal, as valuations of pharma stocks have plunged in recent weeks and following the pledge from Hillary Clinton to crack down on drug prices.