Royal Mail, a cornerstone of the British postal service for over 500 years, is facing a historic change. With the government approving a foreign investor’s takeover, questions arise about its future, the assurances in place, and the impact on thousands of workers. Here, we examine the key details of this unprecedented shift.
Daniel Kretinsky : The Investor Behind the Deal
Daniel Kretinsky, known as the “Czech Sphinx,” is a billionaire investor with growing influence in the UK. He holds a 27% stake in IDS, Royal Mail’s parent company, and has notable interests in West Ham United Football Club and Sainsbury’s. Kretinsky’s investment vehicle, Vesa Equity Investment, is leading the £3.6 billion acquisition, following scrutiny by the UK Government.
Royal Mail’s availability for foreign takeover has been shaped by significant milestones over the past decade, transitioning it from a public institution to a fully privatised company.
- 2013: Royal Mail was separated from the Post Office and listed on the London Stock Exchange, beginning its journey to private ownership.
- 2015: The government sold its final shares, subjecting Royal Mail to market forces.
- October 2023: Royal Mail Group rebranded as International Distribution Services (IDS), solidifying its status as a listed public company.
This series of changes paved the way for the current takeover under UK corporate laws.
How Did Royal Mail Become Available for Takeover?
Royal Mail’s journey to private ownership began in 2013 when it was separated from the Post Office and listed on the London Stock Exchange. By 2015, the Government sold its final shares, making Royal Mail subject to market forces.
In October 2023, Royal Mail Group rebranded as International Distribution Services (IDS), solidifying its position as a listed public company, thus enabling the current takeover under UK corporate laws.
The Government reviewed the deal under the National Security and Investment Act 2021, which allows intervention in transactions impacting national security. Given Royal Mail’s critical role in the UK’s infrastructure, the deal underwent thorough scrutiny.
Government’s Role in the Approval Process
Business Secretary Jonathan Reynolds approved the takeover after securing legally binding commitments from Kretinsky to safeguard national interests, workers, and service obligations.
Key Commitments Secured by the Government
To address concerns about foreign ownership, Kretinsky has agreed to the following pledges:
- Preservation of the Royal Mail Name: The brand will remain unchanged.
- Headquarters and Tax Residency: Both will stay in the UK for at least five years.
- Universal Service Obligation (USO): Royal Mail will continue to deliver letters six days a week nationwide at standard rates.
- “Golden Share” Protection: The Government retains a golden share, requiring consent for key changes, such as relocating headquarters or altering tax residency.
- Pension Protection: Kretinsky has committed not to use Royal Mail’s pension surplus, ensuring financial stability for its workforce.
These measures aim to maintain Royal Mail’s operational continuity and ease concerns regarding foreign ownership.
Impact on Royal Mail Workers
Royal Mail employs approximately 140,000 people, and the takeover brings both assurances and ongoing negotiations. Kretinsky’s EP Group has committed to working closely with unions, including the Communication Workers Union (CWU) and Unite, to support employees. Key pledges include :
- Dividend Sharing : Workers will receive 10% of dividends distributed to Kretinsky.
- Worker Representation : A dedicated worker committee will hold monthly meetings with executives.
- Job Security : EP Group has committed to no forced redundancies until 2025. However, unions are pushing to extend this guarantee beyond the initial two years.
The £3.6 billion takeover of Royal Mail by Daniel Kretinsky signals a significant turning point for the 500-year-old institution. While the Government has secured commitments to protect national interests and workers, the full impact of foreign ownership will become clear in the years ahead.
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At one time u knew Royal Mail would reliably deliver on time this is no longer the case and as it is no longer a national company despite new conditions by the new owners it should no longer be Royal Mail