Drug maker Pfizer (PFE) - Get Report  is negotiating a stock deal to combine its off-patent drugs business with with generic pharmaceutical company Mylan  (MYL) - Get Report , according to several media outlets.

Shareholders of Mylan would get around 40% of the newly formed business and Pfizer shareholders would get the remaining 60%, according to Reuters, whose report relied on a person familiar with the plan. The news service added that Pfizer would receive around $12 billion in "proceeds from a new sale of debt" through the deal that would split off Pfizer's off-patent business into a "tax-free spin-off." 

Mylan could not be immediately reached for comment, but Pfizer was mum on the news.

"We decline to comment on the stories (about the deal with Mylan) or their speculative contents," a spokeswoman for Pfizer told TheStreet on Sunday in an email.

News of the deal was first reported in the Wall Street Journal, which said that the deal could be officially revealed by the companies as early as Monday.

Mylan offers a portfolio of more than 7,500 drugs and other products, including generic medications and so-called biosimilar drugs.

Pfizer is well-known for producing popular drugs such as Viagra, Xanax and Lipitor, as well as over-the-counter remedies such as Advil. 

This story has been updated.