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Royal Mail to be taken over by billionaire

Royal Mail to be taken over by billionaire
Emma Lunn
Written By:
Posted:
16/12/2024
Updated:
16/12/2024

Royal Mail’s parent company, International Distribution Services (IDS), is to be sold to EP Group, which is headed up by Daniel Křetínský.

The £5.3bn deal was agreed in May but was subject to a review under national security laws, as Royal Mail is considered vital national infrastructure. The deal has now been approved by the UK Government.

The Government will retain a “golden share” in IDS that will mean any changes to Royal Mail’s ownership, tax residency or headquarters will need its agreement.

As part of the deal, EP Group has agreed to a number of undertakings. These include retaining the universal service obligation for a first-class postal service to anywhere in the country for a fixed price six days per week for at least five years.

The Royal Mail headquarters and tax residency will remain in the UK for at least five years, while base salaries and benefits for staff will stay the same for at least two years.

EP Group said in a statement: “Having worked closely with the Secretary of State for the Department for Business and Trade, Bidco and EP are pleased to announce that they have entered into legally binding undertakings, conditional upon completion of the acquisition.”

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Under the terms of the deal, employees will receive a 10% share of any dividends paid out to Křetínský. A workers’ group will be formed and meet monthly with company directors.

Křetínský is 49 years old and ranks 33rd on The Sunday Times‘ Rich List, with an estimated net worth of £6bn – up £2bn since 2023. His EP Group already owns 27.6% of IDS, and since 2021, the company has owned a 27% stake in West Ham United.

Royal Mail was fined £10.5m by Ofcom last week for missing its delivery targets, with more than a quarter of first-class mail arriving late. Royal Mail was also fined £5.6m by Ofcom in November 2023 for its performance in 2022/23.