20 December 2024 , 18:53
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The deal has been cleared on national security grounds, taking the Royal Mail a step closer to falling into foreign ownership.
Royal Mail’s sale to Czech billionaire Daniel Kretinsky has taken another step towards completion, after it got the green light on national security grounds.
Pat McFadden, the chancellor of the Duchy of Lancaster, approved the deal under the National Security and Investment act.
The Cabinet Office said it means the deal is approved as long as EP Group “remains able to and continues to provide services that are in support of UK national security”.
Royal Mail delivery vans parked up inside the Whitechapel delivery office (Victoria Jones/PA)
It comes after business secretary Jonathan Reynolds confirmed on Monday that the Government had secured a raft of agreements from Mr Kretinsky over the postal service.
They include protecting the one-price-goes-anywhere delivery commitment and a pledge to keep Royal Mail headquartered in the UK.
The approval earlier in December paved the way for the more than 500-year-old postal service to pass into foreign ownership for the first time.
Mr Kretinsky and International Distribution Services agreed to a deal worth £3.6 billion – or £5.3 billion including debt – in May.
Since then, they were waiting for approval from the Government, which must sanction the takeover given the national importance of the postal service.
Mr Kretinsky – nicknamed the Czech sphinx – has since made several further concessions to gain approval.
They include giving the Government a “golden share” in the postal service, meaning it will need to approve any key changes to Royal Mail’s ownership, headquarters location and tax residency.
The takeover is expected to go through in early 2025.
As part of the agreements, EP Group said it will also ensure that Royal Mail will not change its corporate structure.
Under its service obligations, Royal Mail must deliver letters six days a week to all 32 million addresses in the UK for the price of a stamp.
But Royal Mail has repeatedly called for an overhaul of the service, claiming it is not financially viable.
Regulator Ofcom has been reviewing the future of the universal service since January.
It is proposing plans to ditch Saturday deliveries for second-class letters while keeping first-class mail six days a week.
On Friday, Royal Mail was fined £10.5 million by Ofcom for missing its first and second-class postal delivery targets in 2023-24.