‘Czech Sphinx’ Royal Mail takeover signed off by government and unions
The takeover of Royal Mail parent company International Distribution Services has been signed off by the government and unions, as EP Group is now set to officially gain control of the firm.
The £3.6bn takeover by ‘the Czech Sphinx’, billionaire Daniel Kretinsky, was approved by shareholders in September, and was waiting on approval from the government to proceed.
As part of the sign-off, EP Group made a variety of promises to the government “to reflect their commitment to safeguarding the important role that Royal Mail plays in the UK”.
The Czech Sphinx has pledged to keep Royal Mail as a Universal Service Provider, as well as providing a “one- price-goes-anywhere” service in the UK and delivering first class letters six days a week.
These are no longer promised for just a five year period, as had originally been rumoured, but until EP Group no longer controls IDS.
The company has also agreed to a host of other demands from the government, including a promise not to change Royal Mail’s name, maintain base salaries and benefits for staff for at least two years, and keep it in a robust financial position.
In addition, the government will retail a “golden share” of the company, allowing it to veto any changes to Royal Mail’s ownership, headquarters or tax residency.
As well as a sign-off from the government, an agreement was also reached with two unions over the company’s takeover.
CWU, which represents frontline workers in Royal Mail, and CMA Unite, which represents Royal Mail’s managerial workforce, have signed off on the deal, but both of the union agreements remain subject to internal approvals.
Keith Williams, non-executive chair of IDS, said: “Today’s announcement marks an important milestone in the approvals process. The IDS board welcomes the government’s endorsement and legal backing for the comprehensive package of undertakings and commitments we negotiated.”
“These provide our customers, colleagues, unions, regulators and broader stakeholders with safeguards for the provision of the Universal Service Obligation, the ongoing financial stability of Royal Mail, the maintenance of colleague benefits, and Royal Mail’s broader role in the United Kingdom.”
“We welcome the government’s commitment today to secure a stable future for Royal Mail. This will not come from a change in ownership alone but must also be backed by urgent reform of the Universal Service and the continued transformation of this great British business.”
Last week, Royal Mail was hit with a £10.5m fine over late deliveries, as only 74.7 per cent of First Class mail and 92.7 per cent of Second Class was delivered on time.