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The £3.6bn takeover of Royal Mail’s parent company will be completed this month, nearly a year after it was first agreed, as the Czech billionaire Daniel Křetínský cleared the final regulatory hurdles standing in the way.
International Distribution Services (IDS), the owner of the 508-year-old Royal Mail, said on Thursday the deal “may become or be declared unconditional” by 30 April, after a delay due to issues in Romania.
The most pressing issue, UK government approval, was clinched in December after a state review of national security laws.
However, Křetínský’s company had warned in March that the deal might not be finalised until the second quarter of this year due to regulatory issues relating to foreign direct investment in Romania.
But in a triumph for the billionaire known as the “Czech sphinx”, Křetínský’s EP Group confirmed on Thursday that “all of the regulatory and anti-trust conditions in relation to the offer were satisfied”.
The deal will mean Royal Mail will be controlled by an overseas owner for the first time in its history, which can be traced as far back as 1516 under Henry VIII.
The takeover comes with a number of conditions from the UK government, including that it will retain a “golden share” in IDS, which means any changes to Royal Mail’s ownership, tax residency or headquarters will need its approval. The UK owns golden shares in companies that are regarded as crucial to its security, including the weapons manufacturers BAE Systems and Rolls-Royce.
The takeover had been called in for a review in August on national security grounds, because Royal Mail’s letter delivery still plays a crucial – albeit diminishing – role in the country’s communications infrastructure.
The Royal Mail brand will also be protected for as long as EP owns the company.
EP Group has also agreed to retain the universal service obligation, which guarantees a first-class postal service to anywhere in the UK for a fixed price six days a week, while Křetínský is in control. IDS has suggested second-class post could be reduced to every other weekday.
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The government has blocked Royal Mail from making dividend payouts, or other similar payments to its owners, unless the company meets financial targets and has improved its postal delivery performance.
Dividends and asset sales will also be blocked if they put the universal service at risk.
Royal Mail is the latest British asset to be snapped up by Křetínský, who already owns 27% of West Ham United football club and 10% of the Sainsbury’s supermarket chain. He also holds stakes in several retailers including the US department store Macy’s, the trainer retailer Foot Locker, and the German retailer turned wholesaler Metro.
Meanwhile, Křetínský’s EP Group, Royal Mail’s new owner, primarily runs coal, gas and power generation operations.
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