The companies said Wednesday that Penn West would buy Canetic for C$4.9 billion ($5.1 billion) in cash, stock and assumed debt creating what will be the largest oil and gas trust in North America.
The deal comes exactly one year after Canadian Finance Minister Jim Flaherty announced that income trusts — including energy trusts — would lose their tax privileges in 2011. Income trusts pay virtually no corporate income tax as long as they distribute most of their profit to shareholders. There has been consolidation among income and energy trusts this year as they try to bulk up to be able to withstand the shock of the tax changes. — Peter Moreira
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