UK government approves $4.6-billion takeover of Royal Mail by a Czech billionaire
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6:46 AM on Monday, December 16, 2024
The Associated Press
LONDON (AP) — Britain's government gave the go-ahead Monday for the sale of Royal Mail's parent company to a Czech billionaire, paving the way for the postal service to pass into foreign ownership for the first time in its 500-year history.
Authorities confirmed Monday that the 3.6 billion-pound ($4.6 billion) takeover of Royal Mail's owner, International Distribution Services, by billionaire Daniel Kretinsky's EP Group, can go ahead.
Kretinsky and IDS agreed to the deal in May but had been waiting for official approval under national security laws because of the importance of the postal service in the U.K.
The service will remain headquartered in the U.K. and as part of the deal, Britain's government will retain a so-called “golden share” in the service, meaning it will need to approve any key changes to Royal Mail's ownership, headquarters location and tax residency.
Business Secretary Jonathan Reynolds said the move was a “good deal for the U.K.”
“We have negotiated something which secures the long-term future of Royal Mail and gives it the fresh start that we need," he said.
Royal Mail, one of the U.K.'s oldest institutions, began in the 1500s as a service exclusively for the monarch and the royal court. It became a public postal service in the 1600s.
The company, which was privatized in 2013, has struggled in recent years to adapt as the number of people using the postal service continues to decline steeply.
Kretinsky has business interests across Europe including Eurstream, which moves Russian gas via pipelines through Ukraine, the Czech Republic and Slovakia. He already owns a 27% stake in IDS, and also has stakes in U.K. retail including in leading supermarket chain Sainsbury's.
His firm previously said it viewed IDS as a strong business with the potential to become a leading postal logistics group in Europe.
The takeover deal, which still needs to be voted on by shareholders, is expected to be completed early in 2025.
