Křetínský bid accepted for UK Royal Mail acquisition
Make us a preferred source
Make us a preferred source on Google
The news: Czech billionaire Daniel Křetínský will acquire the owner of Royal Mail, International Distribution Services, and has pledged to revive the UK postal service.
The numbers: Křetínský’s EP Group will take over IDS, which owns both Royal Mail and parcel business GLS, for an agreed price of 370 pence per share, valuing the group at £5.2 billion ($10 billion).
The context: Negotiations have been drawn out over the past month, with Křetínský vowing to not break up the group for at least three years, as well as committing to deliver letters six days a week for five years.
The acquisition has gained significant political attention, given previous concerns raised about international ownership of the UK postal service. Prior to the agreed takeover, Křetínský already owned a stake of 27% in the formerly state-owned company.
The transaction is likely to continue making headlines in the lead up to the UK general election in early July, and Chancellor Jeremy Hunt has previously commented that a bid for Royal Mail would be subject to “normal” scrutiny on national security grounds, adding that international investment in British companies was generally welcomed.
Other commitments in the agreement pertain to EP Group’s pledge to continue recognition of union groups CWU and CMA, as well as committing to maintain salaries, wages, and benefits and allowance packages for at least two years. The unions are expected to engage closely with the Labour party (widely tipped to win the July election) to ensure the EP Group adheres to the commitments.
What they said: Commenting on this announcement, Keith Williams, the chair of IDS, said: "Both the IDS Board and EP are acutely aware of their responsibilities to IDS and particularly to the unique heritage of Royal Mail and its obligations as the designated Universal Service Provider of postal services in the UK. The IDS Board has negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards.
Daniel Křetínský, founder and chairman of EP, said: "IDS, and Royal Mail in particular, form part of the national infrastructure of the countries they operate in. More than that, Royal Mail is part of the fabric of UK society and has been for hundreds of years. The EP group has the utmost respect for Royal Mail's history and tradition, and I know that owning this business will come with enormous responsibility - not just to the employees but to the citizens who rely on its services every day. The scale of the commitments we are offering to the company and the UK Government reflect how seriously we take this responsibility, to the benefit of IDS' employees, union representatives and all other stakeholders.”
The sources: LSE: EP Group’s recommended cash offer, Financial Times
