The Mylan shareholders would receive just over 40% of the newly created unit, with Pfizer shareholders receiving the rest, the person said, adding that Pfizer would also get about $ 12 billion in revenue from a new sale of debt .
Separation of Pfizer's off-patent business would be a toll-free spin-off, allow the person.
Last year, Pfizer said it planned to reorganize itself into three units and separate the consumer health services.
The restructuring will allow the company to evaluate companies better and can result in selling or spinning their non-patented medicines, Wall Street analysts said earlier.
The Wall Street Journal first reported on the talks between the companies on Saturday.
Pfizer and Mylan did not immediately respond to requests for comment.
(Reporting of Maria Ponnezhath in Bengaluru and Gregory Roumeliotis in New York; Editing by Mark Potter and Paul Simao)