Britain’s century-old Royal Mail is set to go under foreign ownership, as the UK government on Monday approved the takeover of its parent company by Czech billionaire Daniel Kratinsky’s EP Group.
The acquisition of International Distribution Services (IDS) is worth £3.6 billion ($4.5 billion).
“The deal protects employees and key services, while Royal Mail will remain headquartered in the UK, preserving UK jobs and tax receipts,” the government said in a statement.
The government will keep a “golden share” in former state monopoly Royal Mail which ensures it has veto power over moving the postal operator’s headquarters abroad and changes to its tax residence.
Both parties are waiting for the government’s green signal after IDS in May accepted the takeover offer from EP Group, which already holds about 28 percent stake.
Business Secretary Jonathan Reynolds said, “Progress towards securing a stable future at Royal Mail has been stalled for many years.”
“We are working towards ensuring a financially stable Royal Mail with protected links between communities that other providers cannot reach,” he said.
Kratinsky made a series of guarantees to gain government approval, notably maintaining the universal service obligation to deliver mail six days a week to all 32 million UK addresses for the price of one stamp.
“EP Group is a long-term and committed investor whose mission is to build Royal Mail into a successful modern postal operator with high-quality service and products for its customers,” Kratinsky said in a statement on Monday.
Royal Mail, which was privatized in 2013, has faced declining parcel volumes, mail delivery delays and strikes over pay in recent years.
-‘watershed moment’-
Monday’s announcement comes after Britain’s communications regulator Ofcom last week fined the postal operator £10.5 million for mail delivery delays.
Ofcom had previously proposed that Royal Mail cut deliveries to five days a week or even just three, potentially saving the company millions of pounds.
The EP Group also announced on Monday that it had reached an agreement in principle with the main unions representing postal workers, the CWU and CMA Unite.
“While many would fear Royal Mail falling into the hands of a foreign equity investor, the truth is that every postal worker knows that the status quo will destroy postal services in the UK,” CWU general secretary Dave Ward said in a statement. Union’s X Account.
The IDS employs approximately 153,000 staff, the majority of whom are represented by Royal Mail.
It has seen its core letter business devastated as consumers increasingly communicate online, which has helped its international parcel business, GLS.
“Given Royal Mail’s long record of service to the UK public, the acquisition is a historic moment,” said Susannah Streeter, head of wealth and markets at Hargreaves Lansdowne.
He said that although there were opportunities to modernize the UK postal infrastructure, “any improvements are likely to take a long time”.
EP Group expects to finalize the acquisition during the first quarter of 2025.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
