Royal Mail: Britain meets terms of deal to sell 500-year-old postal service to Czech billionaire

London
CNN
—

Royal Mail, founded in the 1500s during the reign of Henry VIII, is to be sold to a Czech billionaire in a deal that will keep the organization based in Britain.

Daniel Křetínský’s EP Group has entered into “legal commitments” with the UK government as part of the process to buy the postal service of its British parent company International Distribution Services, a government official said. statement posted on monday

These commitments include seeking government approval to move Royal Mail’s headquarters and tax headquarters overseas, with both remaining in the UK for at least five years.

The EP Group must also comply with the postal service’s “universal service obligation”, which requires priority letters to be delivered six days a week to all locations in the UK for the same rate. The company has also agreed to recognize and “negotiate in good faith” with the relevant workers’ unions.

£3.6 billion ($4.6 billion) deal, International Distribution Services approved in MayIt has raised concerns about the fate of thousands of Royal Mail workers, as well as the future of the national infrastructure that provides a vital public service.

EP Group’s commitments to the government “ensure Royal Mail’s identity as Britain’s flagship organisation, while allowing it to operate as a fully private company without day-to-day government intervention,” the Department for Business and Trade said in a statement. .

The sale comes after a difficult few years for Royal Mail, which was privatized in 2013. The company has suffered a sharp drop in demand for its services, and losses have increased. Appeals to the government to free it from the obligation to deliver priority letters six days a week have fallen flat.

Last week, Ofcom, the U.K. regulator that oversees the postal service, fined Royal Mail £10.5 million ($13.3 million) for failing to meet its delivery targets.

“With millions of letters arriving late, too many people are not getting what they paid for when they bought the stamp,” said Ofcom’s director of enforcement Ian Strawhorne. statement. “Royal Mail’s poor service is eroding public trust in one of the UK’s oldest institutions.”

Křetínský, the majority shareholder of EP Group, oversees a vast empire of European energy companies, traders and football clubs. It is worth $7 billion Bloomberg Billionaires Index.

The tycoon started out as a lawyer, according to the EP Group website. He has also worked in the European financial company J&T, where he became a partner in 2003.

Křetínský founded EP Group in 2016 with business partner Patrik Tkáč. Through his investment group Vesa Equity Investment, Křetínský has acquired stakes in well-known brands such as Foot Locker (FL) in the United States, FNAC in France and Sainsbury’s supermarket in the United Kingdom.

Some British football fans are already familiar with the relatively low-profile billionaire billionaire.

Three years ago, the businessman bought one participation 27% West Ham United Football Club through another of his investment companies. Accordingly, Křetínský is the club’s second largest shareholder website.