A $150-billion U.S. merger between Pfizer (NYSE: PFE) and Allergan (NYSE: AGN) has been called off after the Obama administration issued new rules designed to crack down on corporate tax avoidance.

The pharmaceutical link-up was designed to allow New York-based Pfizer to move its corporate headquarters to Ireland, and possibly reduce its tax bill. If completed, it would have been the second-largest merger in history.

The takeover provided an example of an "inversion," a maneuver by which a U.S. multinational merges with a foreign company and changes its legal tax residence to another country with a lower tax rate.

New rules issued by the U.S. Treasury on Monday seek to discourage inversions. They change how the ownership percentage of the foreign company is calculated and crack down on a tax strategy called "earnings stripping."

Pfizer explicitly said that the new rules are the reason it and Allergan were scrapping the merger plans.

It's the second time in recent years that Pfizer has been left at the altar. In 2014, it tried unsuccessfully to acquire British drug maker AstraZeneca (NYSE: AZN) and it didn't hide the fact that tax savings were one of the main drivers.

Pfizer said it will now look at other methods to try to help boost its share price, including possibly separating parts of its company from one another. It said it will make a decision on its move by the end of this year.

Pfizer shares opened Wednesday 34 cents, or 1.1%, at $31.69 U.S., within a 52-week trading range of $28.25 to $36.46 U.S.

Allergen shares climbed $3.79, or 1.6%, at $239.82 U.S., in the bottom end of a 52-week trading range of $226.43 to $340.34 U.S.