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The owner of Royal Mail has unequivocally accepted a £3.57 billion ($4.6 billion) takeover bid from Czech billionaire Daniel Křetínský, solidifying the sale of one of Britain’s oldest and most iconic institutions. International Distribution Services (IDS), which owns the loss-making postal service, has firmly accepted a £3.70-per-share ($4.69) takeover offer from Křetínský’s EP Group. But who’s Mr. Křetínský, and what drives his pursuit of the postal service?
The 48-year-old “Czech sphinx,” recognized for his quiet, mysterious style, is a formidable entrepreneur and lawyer with a staggering net worth of $9.3 billion, as the CEOWORLD magazine’s Rich List reported. He’s amassed wealth in the energy industry and possesses significant assets across the Czech Republic, Germany, Italy, Slovakia, the Netherlands, and the United Kingdom. These holdings include Eustream, a company that manages the transportation of Russian gas through pipelines spanning Ukraine, the Czech Republic, and Slovakia. Daniel Křetínský commands a 27% stake in International Distribution Services (IDS), the parent company of Royal Mail.
The 508-year-old postal service is being transferred to a foreign entity. This involves commitments such as maintaining its U.K. headquarters, recognizing the postal workers’ union, and upholding Royal Mail’s responsibility to deliver mail across the U.K. at uniform rates. The British government privatized the service ten years ago, listing it on the London Stock Exchange and rebranding it as IDS. In the past year, Royal Mail reported an operating loss of £348 million.
The service was established in 1516 by Henry VIII and was opened to the public by Charles I in 1635. It was named Royal Mail in 1784 and launched the world’s first adhesive postage stamp, the Penny Black, in 1840. Mail volumes surged after the stamp’s launch, reaching over 1 billion a year by 1875. Letter volumes peaked at 20 billion a year in 2004-5, but dropped to 7 billion in the 2022-3 period.
Křetínský’s team has proposed undertakings and contractual commitments with the government and unions, including:
- Retaining Royal Mail’s proposals for the USO for a first-class postal service to anywhere in the country for a fixed price six days a week for at least five years. IDS has suggested second-class post could be reduced to every other weekday.
- Headquarters and tax residency to remain in the UK for five years.
- Maintaining base salaries and benefits for staff for at least two years.
- No changes to Royal Mail’s ownership for three years.
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