UK (Commonwealth) _ With Czech billionaire Daniel Křetínský’s, EP Group, the government has obtained a number of legally enforceable pledges, according to Business Secretary Jonathan Reynolds.
The government has approved Royal Mail‘s sale to Czech billionaire Daniel Kretinsky, marking the first time a foreign entity will own the more than 500-year-old mail service.
Jonathan Reynolds, Business Secretary, said that the government had reached a number of legally binding agreements with Mr. Kretinsky’s EP Group about the postal service. These agreements included a promise to maintain Royal Mail’s UK headquarters and to uphold the one-price-goes-anywhere delivery promise.
Since Royal Mail and the UK postal service are vital to the country, the government must approve the takeover. In May, Mr. Kretinsky and International Distribution Services consented to a deal for £3.6 billion, or £5.3 billion including debt.
Since then, Mr. Kretinsky, also known as the Czech sphinx, has made a number of additional concessions to win support, such as granting the government a “golden share” in the postal service, which means that any significant changes to Royal Mail’s ownership, headquarters, or tax domicile will require its consent.
Mr. Reynolds praised the planned acquisition as advantageous for the UK, Royal Mail employees, and consumers. This would be a terrific bargain for the UK, for the employees of Royal Mail, and, of course, for the customers, he said.
He went on to say that they had reached an agreement that would guarantee Royal Mail’s long-term survival and provide it with the new beginning it needs. If this takeover proceeds, we will be in a stronger position than we would have been otherwise.
According to Mr. Kretinsky, they made an effort to secure unprecedented pledges and initiatives that demonstrate the EP Group’s deep appreciation for Royal Mail as a company, the service it provides to millions of households and businesses in the UK, and its employees.
With the removal of the biggest barrier to the deal’s completion, early 2025 is now the projected completion date for the takeover.
Upon first disclosing the planned purchase, Mr. Kretinsky pledged to uphold the brand name, retain Royal Mail’s headquarters and tax domicile in the UK for the next five years, and safeguard the company’s universal service requirements.
As part of the pledges, EP Group stated that it would also make sure Royal Mail abides by legal requirements and that its corporate structure stays the same.
According to the firm, it has also agreed to recognize and engage in negotiations with the unions that represent Royal Mail’s frontline employees and management, Unite and the Communication Workers Union (CWE), respectively, for a minimum of the next five years.
According to Keith Williams, chairman of IDS, the agreement between EP Group and the government represents a significant step forward in the approvals process.
According to him, the pledges provide protections for our consumers, coworkers, unions, regulators, and other interested parties regarding the Universal Service Obligation, Royal Mail’s ongoing financial stability, the maintenance of benefits for colleagues, and Royal Mail’s expanded role in the UK.
According to the Postal Services Act of 2011, Royal Mail is required by law to deliver letters to all 32 million addresses in the UK six days a week for the cost of a stamp. However, Royal Mail has consistently insisted on redesigning the service due to its unfeasibility.
Though both sides were “pragmatic and understand that the letter market has declined a lot in recent years,” Mr. Reynolds stated that the universal service was a “fundamental part of this agreement.”
After assessing the universal service’s future since January, regulator Ofcom is putting forth suggestions to preserve first-class mail six days a week but doing away with Saturday deliveries for second-class letters.
Ofcom fined Royal Mail £10.5 million on Friday for failing to meet its 2023–24 first and second-class mail delivery goals. The 49-year-old’s current net worth is £6 billion, up £2 billion from 2023, as per the Rich list of the Sunday Times.
Although Mr. Křetínský has taken a low-key approach to his business activities, we do know that he made a significant portion of his fortune in Central and Eastern European energy through a complex web of enterprises. He also owns a football team, just like other people in his income range.
