By Christian Moess Laursen

EP Group agreed to commitments safeguarding Royal Mail's role in the U.K. as it works to finalize its 3.57-billion pound ($4.50 billion) acquisition of International Distribution Services.

The commitments include that Royal Mail would continue as the U.K.'s universal service provider and that there would be no change in the control for at least three years following completion of the acquisition.

Czech billionaire Daniel Kretinsky's EP Group agreed to buy Royal Mail-owner International Distribution Service in May for 370 pence per IDS share.

The private industrial group said it entered into legally binding undertakings with the U.K. Secretary of State for the Department for Business and Trade.

Under the terms, EP Group will ensure that Royal Mail complies with regulatory conditions, and that it won't undergo any changes to its corporate structure. The terms also stipulate that its headquarters will remain in the U.K. for at least the next five years.

In addition, EP Group agreed to recognize and negotiate with the unions representing Royal Mail's frontline workers and its managerial workforce, respectively known as CWU and CMA Unite.

The 500-years-old Royal Mail has suffered in recent years as letter volumes dropped and competition from new delivery services heated up.

The British government privatized the service about a decade ago, listed it on the London Stock Exchange and later changed its name to IDS.

Last month, IDS posted a small pretax profit of 4 million pounds for the fiscal half-year to Sept. 29 but warned rising U.K. taxes would hurt results in the future.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

December 16, 2024 04:30 ET (09:30 GMT)

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