Labour ministers approve £3.6billion takeover of Royal Mail by Czech billionaire Daniel Kretinskys EP Group
Royal Mails takeover by a Czech billionaire has been approved by ministers, it was reported last night.
Royal Mails takeover by a Czech billionaire has been approved by ministers, it was reported last night.
It means that Britains postal service — which traces its lineage back to Henry VIII — will fall under foreign ownership for the first time in its more than 500-years of history.
The BBC said Daniel Kretinsky — who is already the largest shareholder in Royal Mails parent company, International Distribution Services — will be allowed to proceed with his £3.6billion takeover of the group following a national security assessment.
But the UK Government will reportedly maintain a golden share in the business, meaning it will need to approve any major changes to Royal Mails ownership in the future as well as the location of its headquarters and tax residency.
Mr Kretinsky — known as the Czech Sphinx because of his low profile — has also agreed to commitments including that staff will receive 10 per cent of any dividends paid out by the business, as well as the formation of a workers group which will meet every month with company bosses to give posties a greater say in how it is run.
It follows previous pledges made by the billionaire to maintain Royal Mails one-price-goes-anywhere Universal Service Obligation (USO), which requires it to deliver letters six days per week Monday to Friday.
Royal Mail s takeover by a Czech billionaire has been approved by ministers, it was reported last night
The BBC said Daniel Kretinsky (pictured) — who is already the largest shareholder in Royal Mails parent company, International Distribution Services — will be allowed to proceed with his £3.6billion takeover of the group
He has also agreed not to touch the surplus in the companys pension scheme and to keep the Royal Mail brand and its headquarters and tax residency in Britain for the next five years.
The Cabinet Office was contacted for comment. The Department for Business and Trade declined to comment on the report.
Royal Mail will add another famous name to Mr Kretinskys growing roster of British assets.
The tycoon — who made his fortune in the European energy sector — owns a large stake in West Ham United football club, as well as a chunk of supermarket chain Sainsburys.
He swooped on Royal Mail earlier this year with his multi-billion-pound bid, having previously built up a nearly 28 per cent stake in the parent company IDS over several years.
His takeover of Britains postal carrier has proved highly controversial and was called in for review by ministers due to Royal Mails vital role in the UKs national infrastructure.
Royal Mail will add another famous name to Mr Kretinskys growing roster of British assets
Kretinsky swooped on Royal Mail earlier this year with his multi-billion-pound bid, having previously built up a nearly 28 per cent stake in the parent company IDS over several years
However, Mr Kretinsky — whose net worth is estimated at £7billion — appeared to have won round ministers last month when Business Secretary Jonathan Reynolds dubbed Kretinsky a legitimate business figure, despite the billionaires links to Russia through his previous business dealings.
His imminent takeover of the business comes at a difficult time for Royal Mail, which in recent years has been posting hundreds of millions of pounds in losses as it struggles to improve its service levels.
Last week, it was slapped with a £10.5million fine by the communications regulator Ofcom for failing to meet its delivery targets for both first and second-class post.
It has resulted in multiple complaints from customers, some of whom say even important letters such as medical appointments and legal documents are arriving late.
Royal Mail has also been calling for the USO to be altered, arguing the sharply declining amount of letters being posted has made the legal requirement an expansive waste of money for the business.
The USO is currently under review by Ofcom.
Instead, the firm wants to focus more on parcel deliveries, which are more profitable and growing in demand as more people shop online.
