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Czech billionaire Daniel Křetínský is close to finalizing the acquisition of Royal Mail, with sources indicating the deal could be officially confirmed within the next two weeks. This much-anticipated sale, valued at £3.6 billion (approximately 110 billion CZK), is being pursued through Křetínský’s EP Group and has required him to offer additional concessions to appease the UK government and stakeholders.
According to The BBC, negotiations have progressed, with Křetínský agreeing to maintain several important operational aspects of Royal Mail as part of his commitment to secure the deal. This includes ensuring the “one price goes anywhere” universal service, which obligates the company to deliver letters six days per week, as well as respecting union demands not to enforce compulsory redundancies until at least 2025.
Union meetings with Křetínský’s advisors have been described as “constructive” by the Communication Workers Union (CWU), who earlier expressed some caution about the proposed acquisition. Although some union representatives remain wary, the CWU characterized the discussions as honest and are scheduled to continue.
The potential for the acquisition to be approved is also contingent upon the National Security and Investment Act. This legal framework is set to review Křetínský’s ownership, especially since he has already undergone similar scrutiny following increases to his stake within the company.
Among the guarantees offered during negotiations are promises to keep Royal Mail’s brand and headquarters within the UK for the next five years and not to deplete the pension surplus. It is reported additional safeguards may be introduced, extending the duration of these commitments.
Speaking to MPs recently, UK Business Secretary Jonathan Reynolds labeled Křetínský as a “legitimate business figure,” mentioning prior examination of his alleged links to Russia had already been conducted without yielding concerns about his suitability as owner of this historic service.
Royal Mail’s legacy stretches back to 1516, signifying the company’s longstanding importance within the UK. Currently employing over 150,000 people, the necessity to honor its traditional role remains significant amid discussions of reform. Křetínský has previously emphasized his respect for Royal Mail’s rich history and tradition.
Overall, the backdrop to this deal is heightened by Royal Mail’s recent performance challenges. The company has experienced notable declines, with customer complaints surfacing about delivery reliability, as well as significant shifts in customer behavior—most prominently, the dramatic decrease of letter volumes compared to 2011.
Despite the pressures of falling letter volumes, there’s been simultaneous growth within the parcel delivery segment as consumers increasingly favor online shopping and logistics. Royal Mail’s parent company, International Distribution Services (IDS), did manage to report modest profits this past year, attributed entirely to its German and Canadian logistics sectors, effectively offsetting the losses faced by Royal Mail.
While there are suggestions from Royal Mail’s management to the regulator Ofcom indicating potential cost-saving reforms, such as reducing second-class deliveries to only five days per week, Křetínský has reassured his commitment to upholding the universal service obligation. He has stated firmly, “as long as I am alive,” he will endeavor to honor this service, all the way through to addressing the need for reform within the business model itself.
The transition of ownership for such a long-standing institution signals broader changes within the postal service industry, along with pressures to modernize practices to align with changing customer needs. With the ultimate outcome hanging on final approvals, the attention surrounding the deal will only intensify as stakeholders await formal confirmation.
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