THE BURNED OVER DISTRICT

Pfizer and Allergan have called off their merger because President Obama has tightened up the rules and those grand patriotic corporations lost their tax advantage. Now they will concentrate on having their tax lawyers find a way to skirt the current rules and regain their tax benefits.

Pfizer and Allergan said on Wednesday that they had terminated their $152 billion merger by mutual agreement just days after the Obama administration introduced new rules meant to limit the ability of American companies to shift their home overseas simply to lower their tax bills.

The deal, announced in November, would have been the largest transaction of its kind, a so-called inversion that allows an American company to shed its United States corporate citizenship in order to move income beyond the reach of American tax authorities. Allergan has its tax domicile in Ireland.

The decision is a victory for the Obama administration, which had previously moved to discourage such transactions and introduced a more aggressive and expansive series of rule changes on Monday. The latest changes, announced by the Treasury Department in conjunction with the Internal Revenue Service, could have wide-ranging effects on foreign companies with large American operations, tax experts say.

“Pfizer approached this transaction from a position of strength and viewed the potential combination as an accelerator of existing strategies,” Ian Read, the Pfizer chairman and chief executive, said in a news release. “We remain focused on continuing to enhance the value of our innovative and established businesses.”

Pfizer said that the companies determined that the latest rule changes qualified as an “adverse tax law change” under their merger agreement.

News that the companies planned to scuttle the deal first emerged Tuesday night.

And without their tax advantage, they suddenly realized they don't like each other that much. And worse for Pfizer, it will now have to figure out how to make money with a working business model, if they can't find another company to buy and cook the books with.