16th Dec 2024 10:03
(Alliance News) - Royal Mail's sale to Czech billionaire Daniel Kretinsky has been cleared by the UK government, paving the way for the more than 500-year-old postal service to pass into foreign ownership for the first time, PA reports.
Business Secretary Jonathan Reynolds on Monday confirmed the government secured a raft of legally-binding commitments with Kretinsky's EP Group AS over the postal service, including protecting the one-price-goes-anywhere delivery commitment and a pledge to keep Royal Mail headquartered in the UK.
Kretinsky and International Distribution Services PLC agreed a deal worth GBP3.6 billion – or GBP5.3 billion including debt – in May but had been waiting for approval from the government, which must sanction the takeover given the national importance of Royal Mail and the postal service in the UK.
Kretinsky – nicknamed the Czech sphinx – has since made several further concessions to gain approval, including giving the government a "golden share" in the postal service, meaning it will need to approve any key changes to Royal Mail's ownership, headquarters location and tax residency.
Reynolds said: "For too many years progress on securing a stable future at Royal Mail has stalled, but from day one we have been committed to providing a secure future for thousands of workers and customers."
He added: "I'd like to thank EP Group and Daniel Kretinsky for their constructive approach to our discussions and their commitment to protecting this national icon.
"I look forward to working with them to fix the foundations and ensure Royal Mail continues to deliver for the communities and businesses who rely on it most."
EP Group early Monday said it has entered legally binding undertakings with the UK Department for Business & Trade "safeguarding the important role that Royal Mail plays in the UK".
These commitments include that, for three years following completion of the acquisition, there will be no change of control of Royal Mail or of the international parcels arm of IDS and that Royal Mail will continue as the UK's universal service provider, offering a "one-price-goes-anywhere" service and delivering first class post six days a week.
EP Group also said it has reached agreements in principal with Royal Mail unions the Communication Workers Union and the Communication Managers Association, part of Unite. The agreements still need internal approval by CWU and CMA Unite.
IDS shares were up 1.0% to 362.40 pence on Monday morning in London. Under the terms of the GBP3.57 billion takeover offer from EP Group, IDS shareholders will receive 370p per share.
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