Shares in European pharmaceutical companies are jumping on Wednesday morning after media reports that American firm Pfizer is abandoning its merger with Allergan — a deal that would have been worth $160 billion, and been the largest pharmaceutical merger in history.

That news has sent European pharma stocks skywards, with investors clearly taking heart from the cancelling of a deal that would have created the biggest pharmaceuticals company on earth by sales. On Britain’s FTSE 100, the two biggest pharma firms, AstraZeneca and Shire have both seen big gains, jumping 2.66% and 3.3% as of 10:55 a.m. GMT (5:55 a.m. ET). Here’s how that looks:

az plc april 6
shire april 6


Companies based in mainland Europe have also reacted well, with Novartis, the Swiss giant up by more than 1.2%. Roche, also based in Switzerland is up 1.3%, while French-based Sanofi has gained 1.3% on the day.

Pfizer is thought to have pulled out of the merger after the US government took steps to try and prevent so-called tax inversion deals, which — at their most basic level — allow companies to headquarter themselves in countries with low tax rates. Pfizer planned to move to Ireland, where Allergan is based and as a result, pay just 12.5% in corporation tax, far lower than the US rate.

But the new rules from the US Treasury look to have been designed almost specifically to stop Pfizer benefitting from the merger, the Financial Times reports.

As reported by Business Insider