Czech billionaire Křetínský £5.3bn bid for Royal Mail owner approved by UK government

By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. December 16, 2024. Article no 1340.

The UK government has approved Czech billionaire Daniel Křetínský’s £5.3 billion takeover bid for Royal Mail’s parent company, International Distribution Services (IDS). The deal, which has been under review since May 2024, is set to be officially announced on Monday morning, December 16.

Key aspects of the approved deal include:

1. EP Group, Křetínský’s company, will acquire IDS, marking the first time Royal Mail passes into foreign ownership ;
2. The government will retain a “golden share,” allowing it to approve any significant changes to Royal Mail’s ownership, headquarters location, and tax residency.
3. Křetínský has made several commitments to secure the deal:
   • Maintaining the Universal Service Obligation for letter and parcel deliveries ;
   • Preserving the Royal Mail brand name ;
   • Keeping Royal Mail’s headquarters and tax residency in the UK for at least five years ;
   • Not utilizing the pension surplus ;
   • Avoiding compulsory redundancies until 2025 ;
4. Workers will receive a 10% share of any dividends paid out to Křetínský.
5. The deal has been reviewed under the National Security and Investment Act due to Royal Mail’s status as vital national infrastructure.

The acquisition comes at a time when British Royal Mail faces challenges, including declining letter volumes, delivery issues, and recent fines for missing delivery targets. 

The takeover is seen as an opportunity for Royal Mail to address these issues and improve its performance under new ownership.

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© Copyright 2024 – Eurasia Business News. Article no. 1340.