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A new merger by the pharmaceutical titan Pfizer and its powerful rival, Allergan, has set a record. Valued at $160 billion, the deal is said to be the biggest one in health care history, creating the world's largest drugmaker, according to businessinsider.

Pfizer manufactures iconic drugs such as Viagra and Lipitor, which helps to lower cholesterol, even as Allergan makes Botox, which is a global sought-after medication.

The path-breaking agreement between American and Irish companies harnesses a controversial tax-saving strategy called the tax inversion. Such mergers enable U.S. companies like Pfizer, bound by America's relatively high taxes, to save billions of dollars by shifting to low-tax nations such as Ireland.

Hence, Pfizer is expected to deliver more than $2 billion in "operational synergies" in the first three years after the two come together. By the time the first year is completed, the company also expects to have a "pro forma Adjusted Effective Tax Rate" of about 17-18 percent, reports usatoday.

Pfizer CEO Ian Read is quite upbeat about the merger. "The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover, and deliver medicines and therapies to more people around the world," he said. "Allergan's businesses align with and enhance Pfizer's businesses, creating best-in-class, sustainable, innovative, and established businesses that are poised for growth."

Although the rebranding will be called Pfizer Plc, legally, the company's combination will be under Allergan Plc. The pharmaceutical giant will continue to trade on the New York Stock Exchange, under a ticker, PFE.