The sale of Royal Mail’s parent company to the Czech billionaire Daniel Křetínský has been approved by the UK government after a review under national security laws.
A £3.6bn takeover of International Distribution Services (IDS) – the owner of the 508-year-old Royal Mail – by Křetínský’s EP Group was confirmed on Monday morning.
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 assent.
The board of IDS agreed to the takeover in May, after rejecting initial approaches at a lower price.
EP Group has agreed to a make a series of undertakings to persuade the government to let the deal through. They include retaining the universal service obligation for a first-class postal service to anywhere in the country for a fixed price six days a week for at least five years. IDS has suggested second-class post could be reduced to every other weekday.
Other undertakings include keeping the Royal Mail headquarters and tax residency in the UK for five years, and maintaining base salaries and benefits for staff for at least two years.
In a statement, EP said on Monday: “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.”
The UK in August called in the takeover for a review on the grounds of national security, because Royal Mail still plays a crucial – albeit diminishing – role in the country’s communications infrastructure. The UK owns golden shares in companies that are seen as crucial to its security, including the weapons manufacturers BAE Systems and Rolls-Royce.
Approval of the deal would be seen as a triumph for a businessman who – despite his reputation as the low-profile “Czech Sphinx” – has shown a clear interest in snapping up British assets. Alongside EP’s main business running coal, gas and power generation operations, Křetínský owns 27% of West Ham United football club and 10% of the Sainsbury’s supermarket chain.
A completed deal would probably prompt further scrutiny of Křetínský’s business dealings, particularly in Russia. EP Group holds a stake in a Slovakian gas pipeline that continues to pump Russian gas to Europe. The Guardian has reported that Křetínský held talks with Alexey Miller, the head of Russia’s state-owned gas company, Gazprom, and a close ally of Vladimir Putin.
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EP Group is also part-owned by Patrik Tkáč. In June, the Guardian revealed that Tkáč’s J&T Banka is embroiled in a court case over a $6m (£4.7m) loan it provided to the former premier of the Turks and Caicos Islands, Michael Misick, who is facing a corruption prosecution. J&T denied any wrongdoing to the Guardian at the time.
The sale to EP Group will mark the first time that Royal Mail has been controlled from beyond the UK in its history, which stretches back to 1635 when Charles I introduced the first public postal service.
Last week, Royal Mail was fined more than £10m by the postal regulator for missing its delivery targets, with more than a quarter of first-class mail arriving late.