Billionaire Kretinsky nears deal to acquire Royal Mail

The deal will still have to be approved under the National Security and Investment Act

• Pramod Thomas
• 28 November, 2024

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By: Pramod Thomas

THE iconic British postal service, Royal Mail, is on the verge of being sold to Czech billionaire Daniel Kretinsky’s EP Group.

Sources familiar with the matter indicate that the deal is close to being finalised and could be officially announced within the next two weeks, the BBC reported.

To secure the acquisition, Kretinsky has reportedly made several significant concessions. He has pledged to preserve Royal Mail’s universal postal service, ensuring letters are delivered six days a week, from Monday to Saturday, and parcels from Monday to Friday. He has also committed to protecting the company’s pension surplus, keeping the Royal Mail name, headquarters, and tax residency in the UK for at least five years, and avoiding compulsory redundancies until at least 2025.

According to the report, talks are ongoing about potentially extending these guarantees to address concerns and solidify trust in the deal.

The Communication Workers Union (CWU), which represents a significant portion of Royal Mail employees, has been actively engaging with Kretinsky’s advisors.

While some union members remain cautious, the CWU has described the meetings as “honest and constructive” and confirmed that discussions will continue in the coming days.

The acquisition still requires approval under the National Security and Investment Act. However, government officials had already scrutinised Kretinsky’s background during a previous review when he became Royal Mail’s largest shareholder.

Business secretary Jonathan Reynolds addressed concerns about the billionaire’s alleged ties to Russia, dismissing them in Parliament and referring to Kretinsky as a “legitimate business figure” suitable for owning the company.

The £3.6 billion offer has been recommended to shareholders by the board of International Distribution Services (IDS), Royal Mail’s parent company. Shareholder support is expected to be sufficient for the deal to proceed.

This acquisition marks a critical turning point for Royal Mail, with both the government and unions keeping a close watch to ensure the company’s commitments to employees and customers remain intact under its prospective new ownership.

Who is Daniel Kretinsky?

A billionaire with interests in football clubs, media outlets, supermarkets and now the potential new owner of Royal Mail, Kretinsky retains a stubbornly low profile internationally.

The 48-year-old made his fortune in the energy industry, where he controls one of Central Europe’s largest groups, EPH.

But in recent years he has also become a major player in France’s media scene and amassed a fortune estimated by Forbes magazine at more than $9 billion (£7.2bn).

The deal is likely to push the reclusive billionaire further into the spotlight in Britain, where he already owned a stake in the postal service as well as 27 per cent of Premier League football club West Ham.

His move into football brought scrutiny from British tabloids, which labelled him the “Czech Sphinx” and detailed his purchase of a London home for £65 million ($85m) in 2015.

The newspapers also chronicled his relationship with Anna Kellnerova, a Czech showjumper 20 years his junior. The pair have since split up.

Kretinsky has otherwise kept his private life out of the headlines, though he has offered some insights into his business strategy.

He told Forbes in an interview last year that Britain, France and Germany were the most important countries for his company — and he appreciated questions would be asked about him.

Kretinsky was born in the eastern Czech city of Brno and raised during the slow collapse of communism. He is known in his homeland for his energy interests, as well as ownership of football institution Sparta Prague.

His stepfather is a prominent art photographer and his mother served on the country’s constitutional court between 2004 and 2014.

Colleagues and collaborators portray him as an extremely intelligent businessman and hard worker who often sends mails to staff in the early hours of the morning.

(with inputs from AFP)