UK government approves £3.6 billion Royal Mail takeover by Czech billionaire

The UK government has approved the £3.6 billion acquisition of Royal Mail’s parent company, International Distribution Services (IDS), by Czech billionaire Daniel Kretinsky’s EP Group.

The deal, set to be announced Monday, includes “safeguards” such as the government retaining a “golden share,” granting it oversight of changes to Royal Mail’s ownership, headquarters, and tax residency. Kretinsky has committed to maintaining the Universal Service Obligation (USO) for six-day letter deliveries, protecting the pension surplus, and avoiding compulsory redundancies until 2025. Additional union agreements include giving workers a 10% share of dividends and establishing a monthly worker-director forum to enhance employee input.

The takeover follows years of financial struggles and deteriorating performance at Royal Mail, leading to significant customer dissatisfaction and a £10.5 million fine from Ofcom for failing delivery targets.

While IDS posted modest profits last year, these came entirely from its overseas logistics businesses, offsetting losses in Royal Mail.

Kretinsky, who owns stakes in Sainsbury’s and West Ham United, plans to invest in delivery lockers to modernize UK parcel logistics. The acquisition, reviewed under national security laws due to its critical infrastructure status, has been cleared of concerns over Kretinsky’s alleged Russian links. The unions have agreed to the takeover package in principle, pending internal review.