Britain’s centuries-old Royal Mail is set to pass into foreign ownership after the UK government approved the takeover of its parent company by Czech billionaire Daniel Kretinsky’s EP Group on Monday.
The takeover of International Distribution Services (IDS) by EP Group is worth £3.6 billion ($4.5 billion).
The “deal protects workers and key services whilst seeing Royal Mail continue to be headquartered in Britain, securing jobs and tax receipts in the UK”, the government said in a statement.
The government will hold a “golden share” in the former state monopoly Royal Mail which ensures it has veto power over Royal Mail’s headquarters being moved abroad and over changes to its tax residency.
Both parties have been waiting for the government green light since IDS in May accepted the takeover offer from the EP Group, which already held a near 28 per cent stake.
“For too many years progress on securing a stable future at Royal Mail has stalled,” Business Secretary Jonathan Reynolds said.
“We are working towards ensuring a financially stable Royal Mail with protected links between communities other providers can’t reach,” he added.
Kretinsky made a series of guarantees to gain government approval, notably maintaining the Universal Service Obligation (USO) to deliver mail six days a week to all 32 million UK addresses for the price of a stamp.
“EP Group is a long term and committed investor with a mission to make Royal Mail a successful modern postal operator with high quality service and products for its customers,” Kretinsky said in a statement Monday.
Royal Mail, which was privatised in 2013, has suffered in recent years from falling parcel volumes, delays in delivering mail and strikes over pay.
Monday’s announcement comes after Britain’s communications regulator Ofcom last week fined the postal operator £10.5 million for delays in delivering mail.
IDS employs about 153,000 staff, with the vast majority representing Royal Mail. It also has an international parcels business, GLS.
AFP
