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The government has given the green light to the sale of Royal Mail’s parent company to Czech billionaire Daniel Kretinsky’s EP Group for £3.6 billion. The deal, which includes guarantees such as not raiding the pension surplus and maintaining a one-price-goes-anywhere Universal Service Obligation (USO), will be announced on Monday, according to the BBC. The government will retain a “golden share” requiring it to approve any major changes to the company’s ownership, tax residency or HQ location. Unions have also agreed a package of additional commitments, including a new workers’ group for employees to share views with Royal Mail’s directors.
Royal Mail has seen heavy financial losses and its performance has deteriorated in recent years, which has been a source of growing customer discontent. In response, ofcom suggested to regulator Ofcom that reducing second-class deliveries to every other weekday would save up to £300m a year and give the business “a fighting chance”. The volume of letters being posted in the UK has plummeted to half of 2011 levels, while parcel deliveries have become increasingly popular. Parent company International Distribution Services (IDS) made a small profit last year, which was entirely generated by its German and Canadian logistics and parcels business.
Kretinsky is an entrepreneur worth a reported £6bn, who started his career as a lawyer before making his fortune in Eastern European energy interests. Among his other investments are a large stake in UK supermarket Sainsbury’s and ownership of 27% of Premier League football club West Ham United. EP Group companies also own a gas transmission service that still pipes reduced levels of Russian gas to Europe with the consent of the EU.
The takeover was reviewed under national security laws because Royal Mail is considered vital national infrastructure. Business Secretary Jonathan Reynolds referred to Kretinsky as a “legitimate business figure” with previous links to Russia having already been reviewed when he became the company’s largest shareholder two years ago
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