One of Britain’s historic institutions, The Royal Mail, is poised to come under foreign ownership following the UK government’s approval of Czech billionaire Daniel Kretinsky’s EP Group’s acquisition of its parent company. The purchase of International Distribution Services (IDS) by EP Group is valued at £3.6 billion ($4.5 billion).
According to a government statement, the agreement safeguards jobs and essential services while ensuring that Royal Mail remains headquartered in Britain, thereby preserving employment and tax contributions in the UK.
The government will retain a “golden share” in the previously state-owned Royal Mail, which grants it veto rights over any relocation of the headquarters outside the UK and alterations to its tax residence status.
Since IDS accepted the takeover proposal from EP Group in May, both parties have been awaiting government approval; EP Group already owned nearly 28 per cent of the company.
Business Secretary Jonathan Reynolds stated, “For far too long, efforts to secure a stable future for Royal Mail have been stagnant.”
“We are striving to ensure that Royal Mail achieves financial stability while maintaining connections between communities that other providers may not serve.” He added.
To secure government approval, Kretinsky provided several commitments, notably to uphold the Universal Service Obligation (USO) that mandates mail delivery six days a week to all 32 million addresses across the UK at the cost of a stamp.
Kretinsky announced in a statement on Monday, “EP Group is a committed long-term investor with a goal to transform Royal Mail into a successful, modern postal service that offers high-quality services and products to its customers.”
Since being privatised in 2013, Royal Mail has encountered difficulties in recent years due to decreased parcel volumes, mail delivery delays, and strikes related to pay disputes.
IDS employs approximately 153,000 individuals, the majority of whom are associated with Royal Mail, and operates an international parcels enterprise known as GLS.
