The UK government has officially approved the £3.6 billion takeover of Royal Mail’s parent company, International Distribution Services (IDS), by Czech billionaire Daniel Křetínský’s EP Group.
This approval follows a series of legally binding commitments made by EP Group to ensure the future stability of the historic postal service.
Under the terms of the deal, the government will retain a “golden share” in IDS, which will require its approval for any significant changes to Royal Mail’s ownership, headquarters location, or tax residency. Additionally, the takeover agreement ensures that the Universal Service Obligation (USO), which mandates delivery of letters six days a week and parcels five days a week, will remain intact for at least the next five years. Křetínský has committed to honoring this service requirement, with assurances that the USO will be maintained in its current form, or as adapted, for as long as he is in control.
To address employee concerns, the takeover includes several provisions, such as the creation of a workers’ group to meet monthly with directors and a guarantee that workers will receive a 10% share of any dividends paid to the new owners. Křetínský also agreed to maintain the Royal Mail brand and its UK headquarters and tax residency for the next five years. Moreover, the agreement includes assurances that there will be no compulsory redundancies until at least 2025.
Křetínský, who owns a variety of European assets including stakes in West Ham United and Sainsbury’s, has faced scrutiny over his business dealings, particularly his involvement in gas transmission services that continue to transport Russian gas to Europe. However, the UK government has reviewed his background and found no issues with his business record, clearing the way for the deal to proceed.
Royal Mail, which has faced challenges in recent years, including significant financial losses and service issues, will now operate under foreign ownership for the first time in its 500-year history. Despite these challenges, Křetínský has expressed plans to invest in innovations, such as expanding delivery lockers to improve online parcel delivery.
With input from the Guardian and BBC.
