The government has approved the takeover of Royal Mail’s parent company to Czech billionaire Daniel Kretinsky.
Kretinsky’s EP Group has been given the go-ahead to buy International Distribution Group for £3.6bn as long as it makes certain commitments to service provision and staff.
The government will retain a “golden share” in the business that will require it to approve any major changes to the ownership of Royal Mail, the location of its headquarters and where it files its taxes.
EP Group will also be required to commit to the “Universal Service Obligation”, which means it has to deliver letters six days per week (Monday to Saturday) and parcels Monday to Friday, although this commitment is currently under review.
Under the deal, employees will receive a 10% share of any dividends paid out to Kretinsky. A workers’ group will be formed that will meet monthly with company directors.
Kretinsky said negotiations with the government had led to “unprecedented commitments and undertakings that demonstrate the high regard EP Group has for Royal Mail”.
“EP Group is a long term and committed investor with a mission to make Royal Mail a successful modern postal operator with high quality service and products for its customers.”
Last week, IDS was fined by Ofcom for failing to meet delivery targets for first and second class mail.
Unions have cautiously welcomed the news. Sharon Graham, general secretary of Unite, said: “This agreement opens the door to a better future for Royal Mail and its workforce.
“It is now vital that EP and the government continue to work closely with Unite CMA and the CWU to ensure that Royal Mail delivers positive outcomes for its staff and its customers.”
Dave Ward, general secretary of the Communication Workers Union, said the agreement would provide “the foundation to rebuild Royal Mail”.
“These have been challenging negotiations but… we have delivered what by any measure is a groundbreaking agreement which puts postal workers and customers back at the heart of everything Royal Mail does.”
The deal is expected to be finalised in the first quarter of 2025.
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