Hogan Lovells has secured a new role as adviser to the UK government on the £3.6bn acquisition of International Distribution Services (IDS), the parent company of Royal Mail, by Czech billionaire Daniel Křetínský’s EP Group, alongside Kirkland, Paul Weiss, and Slaughter and May.
On 16 December, the UK government announced that it had approved the bid after reaching an agreement with Křetínský’ to protect Royal Mail’s workers and key services while ensuring the company remains headquartered in the UK.
EP Group has committed to preserving the universal service obligation – which includes maintaining the ‘one-price-goes-anywhere’ service with six-day-a-week delivery for first-class letters. Control of Royal Mail must also remain unchanged for at least three years after the acquisition.
The acquisition values IDS’ entire share capital at £3.6bn, implying an enterprise value £5.3bn. The proposal was announced in May, however, the change in government meant that Westminster approval didn’t come through until this month.
Hogan Lovells corporate partner Tom Brassington advised the UK government on the takeover.
A Kirkland team, led by Legal 500 Hall of Famer for high-value PE deals David Higgins, alongside corporate partners Dipak Bhundia, Jiri Peterka, and Fiona Coffee, is advising EP Group on the transaction.
Meanwhile, a Paul Weiss team, led by Legal 500 acquisition finance Hall of Famer Neel Sachdev, corporate partner Stefan Arnold-Soulby, and Legal 500 Hall of Famer for EU and competition law Nicole Kar, is advising EP Group on the acquisition’s financing and structuring.
At Slaughters, Legal 500 leading partner for M&A premium deals Richard Smith is advising the IDS board, alongside corporate partner Claire Jackson.
The deal, which still needs to be approved by IDS shareholders, is expected to complete in the first quarter of 2025.
An offer document released in June estimated that legal fees for EP Group would total £12.3m while legal fees for IDS would also total £12.3m.
In an announcement published on the government’s website, Křetínský said: ‘EP Group is very pleased to have reached this historic agreement with the Business Secretary to safeguard the future of Royal Mail, under EP Group ownership.’
Postal services minister Justin Madders said: ‘A sustainable Royal Mail is a successful Royal Mail, and through this agreement we’re paving the way towards a brighter future where it can be a source of national pride once again.’