Czech billionaire Daniel Kretinsky strikes controversial deal for Royal Mail takeover
- The British government approved a 3.6 billion-pound takeover of Royal Mail by Czech billionaire Daniel Kretinsky.
- Daniel Kretinsky's firm, EP Group, has committed to keep the Royal Mail brand and headquarters in the UK for at least five years.
- This deal represents the first foreign ownership of Royal Mail in its 500-year history, reflecting the evolving nature of the postal service.
In December 2024, the British government approved the takeover of Royal Mail's parent company by Czech billionaire Daniel Kretinsky, marking a significant moment in the postal service's long history. The decision came after Kretinsky's EP Group, which already owned a 27% stake in International Distribution Services (IDS), agreed to a series of commitments to gain government clearance. This move allows for the first transfer of Royal Mail into foreign ownership in over 500 years, a notable change given its longstanding public service role in the UK since its establishment in the 1500s. The ownership transfer is seen as a response to the challenges faced by Royal Mail, including declining mail volumes and the need for business revitalization. As part of the deal, Kretinsky has committed to maintaining the Royal Mail brand name, its operations headquarters in the UK, and its tax residency for a minimum of five years. Additionally, there are legally-binding agreements to protect the company’s universal service obligations, ensuring that mail delivery continues six days a week across the UK. Business Secretary Jonathan Reynolds emphasized that this agreement represents a significant opportunity for Royal Mail to secure a sustainable future in a rapidly changing market. With a decline in traditional postal services due to digitalization, the government views this takeover as vital to adapting Royal Mail's operations and improving its competitive stance in the logistics sector. Furthermore, the deal includes provisions for employee welfare, with Kretinsky pledging to recognize unions for at least the next five years and guaranteeing a share of dividends for workers. Shareholders are expected to vote on this deal early in 2025, which poses a significant step towards completing the transition of Royal Mail into Kretinsky’s portfolio, firmly establishing him within the UK's corporate landscape while simultaneously raising questions about the future of public service mandates.