Daniel Kretinsky: the “Czech sphinx” buying up Europe

Daniel Kretinsky © TOLGA AKMEN/AFP/Getty Images

Few people outside central Europe had heard of Daniel Kretinsky a decade ago. Now he is one of the continent’s top dealmakers with an eye for helpful connections and cheap assets. 

When rumours surfaced last autumn that a Czech billionaire named Daniel Kretinsky had taken a stake in Le Monde, “the news sent a tremor through the newsroom of that august national publication”, says The New York Times. Journalists noted that he’d built his fortune on power plants and coal mines, while he also owns part of a pipeline bringing Russian gas to the West. Why, they wondered, “would an international energy magnate be interested in an anti-Kremlin newspaper that had invested heavily in covering climate change?”

By muscling in on such “a pillar of the French establishment”, Kretinsky became an object of suspicion, says the Financial Times. Concerns about links to Russian president Vladimir Putin – apparently ungrounded – forced one of his friends to deny that he was “a Moscow agent”. Kretinsky’s motive for buying into the prestigious French daily was simply that he loves France – thanks to the French films he saw on Czech TV as a child – and is “dedicated to “strengthening a professional press in Europe”.

A buying spree

Dubbed the “Czech sphinx” by one Polish magazine for his inscrutability, Kretinsky, 43, was little known a decade ago. But over the past ten years a buying spree – stretching from UK power plants to the football club Sparta Prague – has turned him “into one of Europe’s most prominent dealmakers”.

His latest gambit is his biggest yet. Last month, EP Global Commerce, the investment vehicle he controls with his Slovak business partner Patrik Tkac, tabled an €5.8bn takeover offer for German retail behemoth Metro.

Born in Brno in 1975, the son of an informatics professor and a constitutional court judge, Kretinsky studied law, eventually joining J&T, a bank founded by Tkac, in 1999 where he began moving among a “small circle of powerful businessmen”. In 2009, when J&T spun off its energy assets into a new group, EPH, Kretinsky bought out his partners to take full control of the group.  He initially got rich “buying unloved power plants that few wanted amid the drive for renewable energy”, says the FT. He built a local media empire – an almost compulsory exercise in the Czech Republic where nearly all newspapers are in the hands of local billionaires, notes The New York Times. Then he started pushing west.

Why Metro?

What does he want with a struggling Teutonic shopping conglomerate, asks The Economist. The answer lies in Kretinsky’s opportunistic soul. “He’s a transactions guy primarily. He buys cheap with external finance, that’s the nature of his game,” observes Jozef Kotrba, chairman of Deloitte in the Czech Republic. He wants to diversify his investments and, in Metro, he has spotted an opportunity to grab an international retailer “in the process of transformation” on the cheap (Metro is shedding businesses to concentrate on food wholesale). Hence his initial    “stingy bid”.

Kretinsky’s emollient personality may help him win the day. And he has an eye for connections: he is currently dating the daughter of the country’s richest man, Petr Kellner – another longstanding business partner. Indeed, it might be argued that Kretinsky owes much of his “rapid rise” to his early mentors Kellner and Tkac, says The New York Times. In his game, you couldn’t ask for a better education. He learned his craft “under the tutelage of two of the most successful privatisation barons” in post-communist eastern Europe.