Czech Billionaire’s Royal Mail Takeover Gets Green Light
The UK government has approved Daniel Křetínský's £3.6 billion takeover of Royal Mail’s parent company, International Distribution Services (IDS). The Czech billionaire’s EP Group will now hold the reins, having agreed to a set of legally binding conditions designed to safeguard the company’s future and its universal postal service.
Under the deal, the government will keep a “golden share,” allowing it to veto changes to Royal Mail’s tax residency, headquarters, and ownership. EP Group has committed to maintaining the Universal Service Obligation (USO), ensuring letters are delivered six days a week at a flat rate nationwide. This pledge extends for as long as the company owns Royal Mail, surpassing the previously suggested five-year period.
Křetínský has also introduced measures to improve relations with Royal Mail’s 110,000 employees. Workers will receive 10% of any future dividends paid to Křetínský, and have a direct say through a new workers' group that will meet monthly with directors. Communication Workers Union leader Dave Ward called the agreement “groundbreaking,” adding that it provides “a foundation to rebuild Royal Mail.”
Royal Mail has struggled with financial losses and failed service targets in recent years, prompting regulator Ofcom to fine the company £10.5 million last week. Falling letter volumes and fierce competition in parcel delivery have only worsened the situation. However, Křetínský sees opportunity where others see decline. His plans reportedly include heavy investment in delivery lockers to streamline online parcel delivery.
Jonathan Reynolds, Business Secretary, described the agreement as a win for customers and employees, saying it ensures “a financially stable Royal Mail with protected links between communities.” The billionaire, often called the "Czech sphinx," has promised no compulsory redundancies until 2026 and assured that the £1 billion pension surplus will go directly to the company or its staff.
While the takeover faces lingering hurdles, including approval from the European Commission, Křetínský’s 27.5% stake in IDS positions him well to reach the 75% ownership needed to finalize the deal by early 2025.
Royal Mail’s future remains uncertain, with questions around modernizing its services. Ofcom has hinted at reducing second-class delivery frequency to save costs, but concerns about trust in the institution persist. “Far too many people aren’t getting what they pay for when they buy a stamp,” the regulator warned.
Křetínský’s commitments have been broadly welcomed, but his next moves will determine whether Royal Mail can bounce back or if the business remains reliant on assets like its prime property portfolio and profitable international arm, GLS. For now, the billionaire has bought time and trust, but all eyes are on him to deliver.
