Photo credits @ Lionel Allorge, CC BY-SA 3.0, via Wikimedia Commons

Czech billionaire buys Royal Mail for £5.2 billion

Czech billionaire Daniel Křetínský is set to acquire the owner of Royal Mail, International Distribution Services, in a £5.2 billion deal, according to the Financial Times.

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This is the first time that the historic British postal service has been under foreign ownership. Křetínský’s EP Group, already the largest shareholder in IDS with a 27.5% stake, has agreed a takeover price of 370p per share for the London-listed company, the Financial Times reports.

The deal is likely to come under intense scrutiny in the run-up to the UK general election in July, the FT adds, especially as politicians and the Communication Workers Union have already raised concerns about the future of Royal Mail under foreign ownership.

Křetínský, who also has stakes in supermarket chain J Sainsbury and football club West Ham United, has pledged to revive Royal Mail and invest in its modernisation. EP Group’s commitment to key aspects of the postal service, such as maintaining its UK headquarters and universal service obligations, is only guaranteed for five years, according to the FT.

Křetínský’s takeover bid comes amid years of financial difficulties for Royal Mail. As previously reported by Trans.iNFO, the company has seen declining letter volumes and fierce competition in the parcel delivery market, leading to a fall in its share price.

EP Group will face the challenge of addressing these issues while still meeting Royal Mail’s universal service obligation, which requires mail to be delivered at the same cost everywhere in the UK.