The British government has secured a pivotal ‘golden share’ in Royal Mail, clearing the path for a £3.6 billion takeover by Czech billionaire Daniel Kretinsky’s EP Group. This landmark agreement, announced on Monday, establishes legally-binding commitments governing the future of the historically state-owned postal service.
The comprehensive undertakings, crafted after extensive negotiations, address key concerns about the deal’s national security implications. These measures specifically protect Royal Mail’s brand, cypher, universal service obligation (USO), pension surplus, and financial stability. The golden share mechanism is strategically designed to maintain Royal Mail’s UK headquarters and tax domicile.
Labour’s previous openness to the takeover has proven crucial, with Postal Services Minister Justin Madders emphasising the government’s focus on securing optimal outcomes for Royal Mail’s customers while protecting essential community services. Kretinsky, who chairs EP Group, characterised the agreement as ‘historic’ in nature.
The deal has garnered support from key stakeholders, including the Communication Workers Union (CWU) and CMA Unite. Their backing comes with significant worker protections, including a no-compulsory redundancies period and an innovative profit-sharing scheme allocating 10% of future EP Group dividends to employees.
Despite these positive developments, the takeover faces ongoing scrutiny. Sir Vince Cable, who oversaw Royal Mail’s 2013 privatisation, has expressed reservations about Kretinsky’s Russian business connections. The UK Greeting Card Association has voiced concerns about potential service deterioration and price increases.
The deal’s completion remains subject to shareholder approval, with EP Group requiring 75% acceptance to delist International Distribution Services from the London Stock Exchange. Major institutional investors, including Columbia Threadneedle Investments and Schroders, have already reduced their holdings, suggesting growing confidence in the takeover’s success.
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