One of the world’s biggest drug company mergers has been called off.

After the release of new government rules meant to prevent what is known as “corporate inversions,” Pfizer will no longer acquire rival Allergan.

CCTV’s Jessica Stone reports on why the deal that went sour – and what it means for global business.

It’s the end of the line for Pfizer’s $160 billion takeover of rival, Allergan. The two drug makers have called it quits.

Just two days ago, the U.S. government cracked down on certain types of mergers, known as “corporate inversions,” which were designed to slash corporate taxes.

Governments around the world are trying to block the loss of billions when companies leave for nations with lower corporate tax rates. But no major economy has a bigger problem than the United States where the top corporate tax rate is 39 percent. That’s triple what Ireland charges some of its companies, which is why U.S. companies are acquiring businesses in countries like Bermuda and Ireland.

By some estimates these inversions add up to a loss of more than $100B in U.S. tax revenue. Even after this Pfizer/Allergan merger has been cancelled, the question remains whether this new rule will stop the bleeding.