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Britain's Royal Mail was bought by Czech billionaire Daniil Kretinski for $4.6 billion

Britain's Royal Mail was bought by Czech billionaire Daniil Kretinski for $4.6 billion

Holly Adams/Bloomberg/Getty Images

A vehicle outside the Royal Mail collection office in London on May 16, 2024.


London
CNN

Royal Mail's owner has agreed to a £3.57 billion ($4.6 billion) takeover bid from Royal Mail. Czech billionaire Daniil KretinskiThis paves the way for the sale of one of Britain's oldest and most famous institutions to a foreign owner for the first time.

International Distribution Services, which owns the loss-making Postal Service, said so on Wednesday I've accepted £3.70 per share ($4.69) Takeover bid from Křetínský's EP Group.

The deal has consequences for thousands of workers and has raised concerns about the future of a key piece of national infrastructure, which provides a vital public service.

EP Group has made several commitments to address these concerns, including supporting Royal Mail's “universal service commitment”, which requires it to deliver letters six days a week everywhere in the UK for the same flat fee.

It also promised to preserve employee benefits and pensions, and to maintain Royal Mail's headquarters and tax base in the UK.

“The EP Group has the utmost respect for the history and traditions of Royal Mail, and I know that owning this company will come with enormous responsibility – not only for employees but also for the citizens who rely on its services every day,” Kretinsky said in a statement. statement.

He added that IDS has the potential “to become one of the largest postal logistics groups in Europe”, but its “market is evolving rapidly” and it must modernize to keep up with competing delivery services. Křetínský's Vesa Equity Investment, a private equity firm, is the largest shareholder in IDS with a 27.6% stake.

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The deal comes after a difficult few years for Royal Mail, which was privatized in 2013. It has suffered a sharp decline in demand for its services and posted a loss of £348 million ($445 million) for the year ending March 31 – a loss A slightly better result than the previous year when it lost £419 million ($536 million).

“The IDS board believes the offer from EP is fair and reasonable given the uncertainties of the future and allows investors to realize value at a significant premium,” IDS Chairman Keith Williams said in the statement.

However, not everyone is convinced.

Dave Ward, general secretary of the Communications Workers' Union, which represents about 110,000 Royal Mail workers, said the takeover was “the direct result of a failed ideological privatization process more than a decade ago combined with the company's blatant mismanagement in recent years”.

He said workers want more commitments from EP Group about the future of the company.

He added in a statement: “We welcome some of the commitments made, but the reality is that postal workers across the UK have lost confidence in Royal Mail’s senior management and the service has been deliberately reduced.”

Kretinsky's move comes at a politically sensitive moment as the United Kingdom prepares to hold a general election on July 4. The proposed acquisition will be subject to national security review, possibly by a new government. Opinion polls indicate that Labor will win its first election since 2005 and replace the current Conservative administration.

Labor has already shown keen interest in the deal.

“The Royal Mail is as British as it gets, and Labor will take the necessary steps to protect its identity and undeniable place in public life,” Jonathan Reynolds, the party’s business spokesman, wrote in a blog post. letter To Křetínský earlier this month.

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Kretinsky, a little-known Czech national, made his fortune through a sprawling empire of European energy companies, retailers and football clubs. His fortune is estimated at $7.7 billion, according to the Bloomberg Billionaires Index, and he owns a 27% stake in West Ham United Football Club.