NEW YORK (CNN/Money) - Merck & Co. pulled the $980.7 million initial public offering of its Medco prescription benefits unit Tuesday due to market conditions.

Merck said that it postponed the offering late Tuesday after the Securities and Exchange Commission had declared effective the registration statement from Medco Health Solutions Inc., including a review of the unit's recognition of retail copayments as revenue.

The delay was solely due to market conditions, Merck said in a statement. The company remains fully committed to divesting of Medco within 12 months.

"Merck has strongly maintained that its accounting practices are appropriate and in accordance with generally accepted accounting principles," the drugmaker said.

Franklin Lakes, N.J.-based Medco had been expected Tuesday to price 46.7 million shares at $20 to $22 each via co-lead underwriters Goldman Sachs and J.P. Morgan. The company had been slated to trade on the New York Stock Exchange under ticker symbol MHS.

However, Merck did not indicate whether it would cancel the Medco IPO or would schedule the offering to price at a later date.

The Medco offering had come under significant scrutiny since the company revealed in an SEC filing Friday that it booked more than $14 billion in revenue that it didn't actually collect. The money involved reflects copayments on prescriptions that health plan members using Medco paid when filling prescriptions but never went to Merck. The drugmaker booked the money as both revenue and an expense.

Earlier Tuesday, Wall Street sources told CNN/Money that Goldman Sachs, one of the co-lead underwriters, didn't have enough orders to place all 46.7 million shares and that the pricing of the deal could fall to $16.50 to $17.50 a share.

The offering, which has already been cut from a range of $22 to $24 a share, has been delayed twice.

Merck had planned to sell 20 percent of Medco through the proposed IPO and to shed its remaining stake in a tax-free transaction about a year from now. Merck (MRK: Research, Estimates) shares, which dropped more than 4 percent Tuesday to $45.75, fell 50 cents to $45.25 in after-hours trading on Instinet.

Medco wasn't the only company to postpone its planned IPO Tuesday. St. Paul Cos. said Tuesday that it delayed the offering from Platinum Underwriters Holdings Ltd., its reinsurance unit. Platinum operates through three subsidiaries: Platinum Underwriters Reinsurance Inc., Platinum Re Ltd. and Platinum Underwriters Bermuda Ltd.

The Platinum IPO had been on the calendar as "day-to-day." The company had expected to sell 40 million shares at $23 each via Goldman Sachs, Merrill Lynch and Salomon Smith Barney.