The UK business secretary has today [16 December] confirmed that he has received ‘legally binding commitments from Royal Mail bidder Daniel Křetínský that are intended to secure the long-term, sustainable future of Royal Mail whilst protecting crucial services for millions of customers across the UK’.
In May 2024, International Distribution Services (IDS), the parent company of Royal Mail, submitted paperwork officially recommending a cash offer for the takeover of the company, made by Czech billionaire Daniel Křetínský.
Until now, the £3.6bn takeover had not progressed much since then, largely because of the national significance of Royal Mail and caution that the deal is in the best interest of all stakeholders.
According to the Department for Business and Trade, the agreement it has made with Křetínský’s EP Group, contains ‘commitments that protect, and secure investment in, Royal Mail’s postal network which is important to everyone from small business owners in Southampton to online shoppers in Shetland’.
The Department for Business and Trade says that these commitments ‘deliver on the government’s Plan for Change, kickstarting economic growth by providing stability to a national institution that strengthens the foundations of Britain’s domestic supply chain and delivers better public services to people across the whole country’.
Business secretary Jonathan Reynolds commented: “For too many years progress on securing a stable future at Royal Mail has stalled, but from day one we have been committed to providing a secure future for thousands of workers and customers.
“Today’s agreement is yet another example of this government’s commitment to working hand-in-hand with business to generate reform give respite to people right across the UK, as we are working towards ensuring a financially stable Royal Mail with protected links between communities other providers can’t reach.
“I’d like to thank EP Group and Daniel Křetínský for their constructive approach to our discussions and their commitment to protecting this national icon. I look forward to working with them to fix the foundations and ensure Royal Mail continues to deliver for the communities and businesses who rely on it most.”
As part of the agreement, the government has negotiated a ‘golden share’ which will ensure that, ‘with very limited exception, the headquarters of Royal Mail cannot be moved abroad and that Royal Mail cannot change where it pays its taxes, in either case without UK government approval’.
These restrictions, the government has confirmed, will also apply to any future owners of Royal Mail.
EP Group chairman Daniel Křetínský said: “EP Group is very pleased to have reached this historic agreement with the business secretary to safeguard the future of Royal Mail, under EP Group ownership.
“We would like to thank the business secretary for the constructive negotiations that have resulted in unprecedented commitments and undertakings that demonstrate the high regard EP Group has for Royal Mail as an institution, the service it provides to millions of UK homes and businesses, and Royal Mail employees.
“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. We look forward to delivering on this mission alongside our partners in government.”
Křetínský’s EP Group has also committed to honour any new agreements entered into with the postal unions, recognising that workers should be placed at the heart of a sustainable Royal Mail.
Dave Ward, general secretary of the Communication Workers Union (CWU) said: “We are pleased to have reached a negotiators settlement with EP Group covering crucial areas such as job security, the governance of the company, a meaningful stake in the business for employees, restoring quality of service, legally binding commitments and improving the terms and conditions of our members.
“This agreement provides the foundation to rebuild Royal Mail. These have been challenging negotiations but through the support of our members we have delivered what by any measure is a groundbreaking agreement which puts postal workers and customers back at heart of everything Royal Mail does.”
The story of Royal Mail’s proposed takeover was one of the most-read stories in 2024. To find out what the other biggest stories of the year have been, click here!
