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Parent company IDS agreed to the takeover in May, although both sides have been awaiting UK government approval.
ADVERTISEMENTThe sale of Royal Mail’s parent company to Czech billionaire Daniel Křetínský has been approved by the UK government, the involved firms have announced.
The £3.6bn (€4.3bn) takeover of International Distribution Services (IDS) was given the green light after Křetínský’s EP Group agreed to a number of commitments.
Specifically, the government will retain a “golden share”. This means that it will be able to block major changes to Royal Mail’s ownership, headquarters location and tax residency – if it ever deems it necessary to do so.
Other conditions require that Royal Mail continue the Universal Service Obligation for at least five years, thereby delivering first-class letters six days a week for a fixed price.
EP must also keep Royal Mail headquarters and tax residency in the UK for the next five years, recognise relevant postal-worker unions, and maintain Royal Mail’s current ownership for at least three years.
Unions met with EP representatives over the weekend to voice their requests. While agreements were reached in principle, official union backing is still required.
“EP Group is a long term and committed investor with a mission to make Royal Mail a successful modern postal operator with high quality service and products for its customers,” said EP chairman Daniel Křetínský in a statement on Monday
“We look forward to delivering on this mission alongside our partners in government,” he added.
Křetínský expands UK influence
The board of IDS agreed to a takeover offer from EP in May, which valued the firm at 370p (446c) a share.
In August, the government then announced it was reviewing the deal on national security grounds, as Royal Mail is considered to be a vital element of UK infrastructure.
The takeover means that Royal Mail will be in non-UK hands for the first time in its 508-year-old history.
Křetínský, however, is no stranger to British investments.
While he has made his mark in energy projects in eastern and central Europe, the tycoon now owns a 10% stake in UK supermarket Sainsbury’s – as well as a 27% share in football club West Ham United.
Royal Mail, which was privatised more than a decade ago and is now in urgent need of investment, will present a new challenge.
Earlier this month, regulator Ofcom fined the service £10.5m (€12.7m) for failing to meet delivery targets.
ADVERTISEMENTThe fine came after a previous Ofcom fine of £5.6m (€6.7m) for the same failure last November.
In the year to March 2024, Royal Mail delivered only 74.7% of first-class mail and 92.7% of second-class mail within regulatory time limits.
The service is supposed to deliver 93% of first-class mail within one working day of collection, and 98.5% of second-class mail within three working days of collection.
The company blamed poor performance on financial troubles.
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