Daniel Kretinsky's Takeover of Royal Mail

This month, Czech billionaire Daniel Kretinsky's EP Group completed its £3.6 billion takeover of International Distribution Services, the parent company of Royal Mail. It put Royal Mail under foreign ownership for the first time in more than 500 years.

The IDS board agreed to EP Group's offer of 370p per share in May last year. Because Royal Mail is seen as vital national infrastructure, the government called in the deal for review under the National Security and Investment Act 2021 in August last year. The Act lets the government examine deals in sensitive sectors and either impose conditions or block them on national security grounds.

The government cleared the deal in December after EP Group agreed a set of legally binding commitments. The government received a golden share, a special share that gives it a veto over key changes to Royal Mail's ownership, headquarters and tax residency. EP Group also agreed to keep Royal Mail's headquarters and tax residency in the UK, recognise the postal unions, keep the current ownership structure for at least three years and not place additional debt or security on Royal Mail's assets for five years. It also committed to keep the universal service obligation to deliver mail six days a week to all 32 million UK addresses.

The deal still needed other regulatory approvals, including in Romania, before it could become unconditional. It completed this month, with Kretinsky becoming chairman of both Royal Mail and IDS.

The National Security and Investment Act gave the government a real say in this deal. Kretinsky won approval, but only by agreeing to binding conditions.