Royal Mail takeover by Czech billionaire approved for £3.6bn

Czech billionaire Czech billionaire Daniel Kretinsky now owns Royal Mail, following a £3.6 billion takeover

Royal Mail sign seen at the Mount Pleasant office
Czech billionaire Czech billionaire Daniel Kretinsky now owns Royal Mail, following a £3.6 billion takeover
(Image credit: Vuk Valcic/SOPA Images/LightRocket via Getty Images)

The £3.6 billion, 370p a share takeover of International Distribution Services (IDS), the owner of Royal Mail, by a company owned by Czech billionaire Daniel Kretinsky has passed a review prompted by concern over national security, says Jasper Jolly in The Guardian. This means that Royal Mail, which can be traced back to 1516, will be controlled by an overseas owner for the first time. In return, the state will retain a “golden share” in IDS, so any changes to Royal Mail’s ownership, tax residency or headquarters will need its assent. Royal Mail has also agreed to uphold the universal service obligation for first-class mail for at least the next six years.

In addition to securing the support of the government, Kretinsky also seems to have won over the unions, which are now praising the deal as a “fresh start”, says James Warrington in The Daily Telegraph. Staff have been promised 10% of any dividends paid out to Kretinsky, as well as a greater say in how the company is run through “a new workers’ group that will meet with bosses once a month”. He also says there will be no compulsory redundancies until any reforms to Royal Mail’s universal service obligation have been made.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri