Czech billionaire Daniel Křetínský to acquire Royal Mail owner in £5.2bn agreement

Czech billionaire Daniel Křetínský has made a bold move in the business world by agreeing to buy the owner of Royal Mail in a deal worth £5.2bn. This deal, which values the former UK postal monopoly at 370 pence a share, marks a significant shift for the iconic company away from public markets.

Křetínský’s EP Group, of which he is already the largest shareholder, has been in talks with International Distribution Services (IDS), the parent company of Royal Mail, for the past few weeks to finalize the deal. The acquisition comes at a crucial time, as Royal Mail has faced challenges such as strikes and the pressure of delivering letters at a fixed price across the country since privatization.

The announcement of the transaction has sparked interest and concern, especially among postal workers and regulators. Křetínský has assured that under his ownership, service levels will be maintained and the company’s UK headquarters will remain intact. He emphasized the need for modernization and investment to keep up with the evolving market.

The deal, if approved by regulators, could have far-reaching implications for both the business and the customers who rely on Royal Mail’s services. With declining demand for letters and increasing competition in parcel deliveries, EP Group will face challenges in meeting Royal Mail’s universal service obligation while adapting to the changing landscape of the industry.

Despite the uncertainties ahead, the IDS board believes that the offer from EP Group is fair and reasonable, allowing investors to realize value at a significant premium. This acquisition could potentially reshape the future of Royal Mail and its associated businesses, including the fast-growing parcels business GLS.