“Far-reaching package”: Royal Mail sold to Czech billionaire

“Far-reaching package”
Royal Mail sold to Czech billionaire

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After making significant concessions and significantly increasing the offer, the parent company of the British Post Office has agreed to sell its subsidiary. Letters will continue to be delivered six days a week, and jobs and pensions will remain intact. The government has the final say – and thus probably the Labour Party.

Czech billionaire Daniel Kretinsky is continuing to expand his corporate empire. The parent company of the British Royal Mail has agreed to an improved takeover offer. International Distribution Services (IDS) will therefore go to the Czech investor for just under 3.6 billion pounds (4.2 billion euros), the company announced. “The board of IDS has negotiated a far-reaching package,” said Keith Williams, the chairman of the board. This includes, among other things, that the Royal Mail will continue to deliver mail six days a week. Employee benefits and pensions will be retained, as will the company’s headquarters in London and its British tax residence.

Royal Mail 3.84

Kretinsky’s investment company EP Group, as the buyer, will recognise the Royal Mail unions for at least five years after the takeover and will commit to maintaining wage levels. There will be no forced redundancies. “The extent of the commitments shows how seriously we take this responsibility,” Kretinsky explained.

The CWU union plans to meet with representatives of the EP Group next week to discuss future cooperation. “We will also be in direct contact with the Labour Party and other interest groups to demand a new ownership model for Royal Mail,” said the CWU, referring to the British opposition party, which is considered to have a good chance of winning the upcoming elections on July 4. The British government still has a right of veto.

Kretinsky’s investment company EP Group had previously increased its bid to 370 pence per share after IDS had rejected an earlier offer of 320 pence. The current price assumes a company value of 5.28 billion pounds, the statement said. The deal still has to be approved by the authorities. The takeover is also expected to be approved by the shareholders’ meeting in September.

Kretinsky already had a 27 percent stake in IDS through Vesa Equity Investment, a vehicle held jointly with his investment partner Patrik Tkac. In addition to Royal Mail, which is struggling with the consequences of falling letter volumes, IDS also owns the parcel service and DHL competitor GLS.

With the takeover, Kretinsky is further expanding his corporate empire. Only last week he received a commitment from Thyssenkrupp to buy 20 percent of the steel subsidiary Thyssenkrupp Steel Europe in order to forge a joint venture with his energy holding company. Among other things, he owns all or part of the lignite companies Mibrag and Leag in eastern Germany, which in future want to increasingly generate climate-neutral electricity from renewable energies. Slovakia’s largest electricity producer, Slovenske elektrarny, is also part of his corporate conglomerate. Kretinsky is also a major shareholder in the food wholesaler Metro and sets the tone for the French retail chain Casino.

Kretinsky was born in Brno in 1975. Forbes estimated the wealth of the lawyer and investor at $9.7 billion. He also owns 27 percent of the shares in the English Premier League football club West Ham United. He is also the owner of the top Czech club Sparta Prague.

The Royal Mail was privatised in 2013. Since then, the core letter business has struggled because more and more people are communicating online. The parcel business, however, has benefited from this development.

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