LONDON - EP UK Bidco Limited, a company indirectly owned by EP Group and J&T Capital Partners (WA:CPAP), has entered into a Deed of Undertaking with the UK Government, ensuring a series of legally binding commitments to protect the operations and obligations of Royal Mail (LON:IDSI). This move follows the May 29, 2024, agreement to acquire International Distribution Services plc (IDS).
The Deed, conditional upon the acquisition's completion, extends various protections beyond the initial proposals. Notably, Royal Mail will continue as the Universal Service Provider, with no change in control of GLS or Royal Mail for at least three years post-acquisition. The agreement also includes maintaining Royal Mail's compliance with Ofcom's regulatory conditions and ensuring its financial sustainability before any capital returns.
Additional undertakings cover the five-year period following the acquisition. These include limitations on securing additional debt with Royal Mail Group assets and a commitment to consult with UK Crown Dependencies and Overseas Territories on service changes. Royal Mail's environmental goals are also emphasized, with targets to reach Net Zero by 2040 for the Royal Mail Group and 2045 for the GLS Group.
The Deed also stipulates that Royal Mail's headquarters and tax residency remain in the UK, with the issuance of a non-transferable share to the Secretary of State ensuring these conditions persist even with potential ownership changes.
Furthermore, Royal Mail is required to maintain its brand identity, including the use of the Royal Cypher, and ensure a board composition with independent and UK or British national directors. The company must also continue recognizing and negotiating with labor unions CWU and CMA Unite.
The acquisition is still subject to regulatory conditions outlined in the Offer Document published on June 26, 2024. While several conditions have been met, approvals from the European Commission, UK NSI Act, Foreign Direct Investment, and EU Foreign Subsidies Regulation are pending. The completion of the offer is expected in the first quarter of 2025, subject to these remaining conditions.
This article is based on a press release statement and provides an overview of the commitments EP Group has made to the UK Government in the context of their acquisition of IDS.
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