Pfizer Inc. and Allergan PLC are on the cusp of striking a merger deal worth more than $150 billion that would create the world’s biggest drug maker by sales, according to people familiar with the matter.

The final terms of the deal include 11.3 Pfizer PFE, -0.69% shares for every Allergan US:AGN share, the people said. The deal also contains a small cash component, they said. The boards of each company are expected to approve the agreement Sunday and it could be announced Monday.