Royal Mail under a New Flag: Daniel Kretinsky's Takeover

The British government has given the green light for the takeover of Royal Mail by Czech billionaire Daniel Kretinsky, marking the first foreign ownership of the traditional postal service. This approval followed a thorough review under the National Security and Investment Act. Kretinsky and International Distribution Services (IDS) had already reached an agreement in May, but government approval was essential due to the national significance of the company. Kretinsky, often dubbed the "Czech Sphinx," has made various commitments to secure the deal. These include keeping the Royal Mail name, headquarters, and tax residency in the United Kingdom for the next five years. Additionally, the universal service obligations are to be maintained. Furthermore, Kretinsky has agreed to grant employees a 10% share of the dividends paid to him. The government also retains a so-called "golden share," granting it a veto right on significant changes regarding ownership structures, headquarters, and tax residency. It is clear that Kretinsky will not tap into the pension surplus and, at the unions' request, no forced redundancies will occur until 2025. However, unions are pushing for further assurances and demanding an extension of the commitment regarding forced redundancies. A shadow is cast over the takeover by a £10.5 million fine imposed by the regulator Ofcom on Royal Mail for missing the delivery targets for the fiscal year 2023-2024. Only just under three-quarters of first-class mail arrived on time, well below the 93% target, and for second-class mail, the rate was 92.7%, also below the target of 98.5%.