Billionaire dodges scrutiny as Labour approves takeover of Royal Mail
- The British government has approved the purchase of the International Distribution Services by Daniel Kretinsky.
- The acquisition comes with conditions to protect the postal service and workers' rights.
- This deal represents a significant change in the operational management of Royal Mail, aiming for modernization and worker engagement.
In the United Kingdom, the takeover of the Royal Mail's parent company, International Distribution Services, by Czech billionaire Daniel Kretinsky has been approved by the British government. The transaction, valued at $4.56 billion, is significant as it marks the first instance in 500 years that the Royal Mail would be operated by an overseas owner. To safeguard the postal service and ensure compliance with national security regulations, the British government has mandated that Kretinsky’s EP Group obtain approval for any major changes regarding the Royal Mail’s operations. This includes its headquarters' location, tax residency, and operational modifications. The deal includes legally binding commitments to protect workers' interests and maintain the Universal Service Obligation, which mandates specific delivery practices within the UK. Kretinsky has made assurances to uphold this obligation for the duration of his life. Part of the arrangement also includes measures for worker engagement, such as forming a new workers' group that will have direct communication with Royal Mail's directors. These changes aim to address longstanding tensions related to worker pay and conditions, which have been a point of contention for the Communication Workers Union, especially given Royal Mail's conflicts with the union over labor issues. Additionally, this acquisition is seen as a response to the declining letter volumes the company faces and the challenges in making its operations profitable. Royal Mail has struggled to adapt to the advancements in technology and changes in consumer behavior, which impacted its traditional delivery methods. With the advent of online shopping, courier services have tried to fill the void, leaving the Royal Mail to compete in a shrinking market. The deal’s conditions also include a period of commitment concerning job security, wherein there will be no compulsory redundancies until 2025, addressing union concerns. Kretinsky’s business background and prior dealings have been scrutinized, notably his connections to Russia, which were reviewed by the Business Secretary, who defended Kretinsky as a legitimate business figure. As such, the government appears to be taking calculated steps to ensure that the services connected to this historic institution remain robust, focusing on modernization efforts and community engagement for the future.