After announcing the biggest merger agreement for 2015, Pfizer announced Wednesday that the $160 billion merger with Ireland-based Allergan PLC would not proceed in light of new regulations passed by the U.S. Department of Treasury that curb tax-avoiding corporate mergers. The regulations were passed Monday, and an announcement from Pfizer was widely expected Wednesday.

On its website, the New York company issued a statement saying “the merger agreement between Pfizer and Allergan PLC has been terminated by mutual agreement of the companies. The decision was driven by the actions announced by the U.S. Department of Treasury on April 4, 2016, which the companies concluded qualified as an ‘Adverse Tax Law Change’ under the merger agreement.”

The statement also said Pfizer would “pay Allergan $150 million for reimbursement of expenses associated with the transaction.” According to earlier reports, this amount was said to be up to $400 million.

The new regulations from the U.S. Treasury make it more difficult for American companies to move their tax accounting offshore by merging with a foreign company in a country with lower taxes.

Pfizer had also planned to decide by 2016 if it would separate its established and innovative businesses but after the announcement of the Allergan deal, it had pushed the date to 2019. However, now that the merger deal is canceled, Pfizer said it would make the separation decision “by no later than the end of 2016.”

Pfizer shares had closed Tuesday trade 2.15 percent higher and were trading 1.18 percent up in pre-market trade Wednesday. Conversely, Allergan shares fell almost 15 percent Tuesday and were lower by another 1.28 percent in pre-market trade Wednesday.