Royal Mail is set to pass out of British hands for the first time in its 500-year history, after ministers approved a £3.6bn sale to Czech billionaire Daniel Kretinsky, known in business circles as the “Czech sphinx”.
The Government will retain a “golden share” in the firm, ensuring it can influence major governance decisions. As part of the agreement, employees will benefit from a 10pc share in any dividends Mr Kretinsky’s investment company, EP Group, receives. Meanwhile, postal workers are poised to have a stronger voice in how the service operates, thanks to a new employee group set to meet with management monthly.
These concessions come after weeks of intensive talks and follow earlier commitments made by Mr Kretinsky to uphold iconic elements of the Royal Mail. He is bound by undertakings to maintain Saturday first-class letter deliveries, preserve the Royal Mail brand, and keep the company’s headquarters and tax presence in Britain.
Dave Ward, general secretary of the Communication Workers Union, acknowledged that some may fear foreign ownership, but insisted the current direction of the company was unsustainable. “It is time for a fresh start and a complete reset of employee and industrial relations,” he said. Mr Ward added that the union had reached a “negotiators’ settlement” with EP Group, encompassing job security, governance reforms, and a meaningful employee stake in the business.
Despite concerns raised on national security grounds—given Royal Mail’s critical role in delivering essential communications—Mr Kretinsky already holds significant British interests, including stakes in Sainsbury’s and West Ham United Football Club. His involvement in the energy sector, including holdings in crucial gas pipelines, has also attracted scrutiny.
Royal Mail’s fortunes have faltered in recent years. The business reported a £349m loss last year and recently incurred a record £10.5m fine after more than a quarter of first-class letters arrived late. Executives have argued that the Universal Service Obligation—requiring six-day delivery—needs urgent overhaul, asserting it no longer reflects today’s postal landscape.
Mr Kretinsky has indicated that he will invest around £800m in the company, focusing on expanding parcel infrastructure, including new parcel lockers, and undercutting rival delivery operators. The goal is to revive Royal Mail’s profitability at a time when traditional letter volumes are declining.
Keith Williams, chairman of International Distribution Services (Royal Mail’s parent company), welcomed the Government’s endorsement. He stressed that the new owner’s undertakings, combined with the “golden share”, safeguard the Universal Service Obligation, secure the company’s financial footing and ensure that employee benefits are maintained. He also called for urgent regulatory reforms to enable Royal Mail to adapt to changing consumer demands.
While the deal marks a symbolic end to a half-millennium of British ownership, both management and unions hope it will herald a sustainable new era for one of the UK’s most historic institutions.
Read more:
Royal Mail enters foreign ownership for the first time in five centuries as Czech billionaire strikes £3.6bn deal