GE, Valeant Deals Fueled by Tax Rules That Favor Foreign Assets

Prospective deals by General Electric Co. and Valeant Pharmaceuticals International Inc. this week show how the U.S. tax code is helping drive billion-dollar mergers and acquisitions.

GE can tap the $57 billion of cash it has amassed overseas to finance a purchase of most of France’s Alstom SA, a person with knowledge of the matter said. By doing so, GE would take advantage of its overseas profits instead of bringing them back to the U.S., where they would be taxed at a higher rate.