Saturday, 15 March 2025
The British government has approved the sale of International Distribution Services (IDS), the parent company of Royal Mail, to Czech billionaire Daniel Křetínský’s EP Group. The transaction is valued at approximately £3.6 billion, or £5.3 billion including debt, and marks a significant acquisition for EP Group.
The government will retain a “golden share” in the company, ensuring that any major changes, such as relocating headquarters or altering ownership structures, will require its consent. The new owner is also bound to uphold the universal service obligation, which mandates the delivery of letters six days a week and parcels from Monday to Friday.
Křetínský has provided additional guarantees to secure government approval. These include commitments to job protection, with no forced layoffs, and a provision ensuring employees receive 10% of dividends. Furthermore, a dedicated employee group will meet monthly with Royal Mail’s leadership, providing workers a stronger voice in the company’s management.
IDS accepted the takeover bid from EP Group in May, after an improved offer of 370 pence per share—an increase over the initial bid rejected in April. Křetínský already held a 27.5% stake in the company prior to this deal.
British Secretary of State for Business and Trade Jonathan Reynolds welcomed the agreement, stating that the government had received legally binding commitments from Křetínský to ensure Royal Mail’s long-term sustainability while safeguarding essential services for millions of customers. “I thank EP Group and Mr. Křetínský for their constructive approach to negotiations,” Reynolds said.
Křetínský emphasized EP Group’s commitment to revitalizing Royal Mail: “EP Group is a long-term and dedicated investor, aiming to transform Royal Mail into a modern, efficient postal operator delivering high-quality services and products to customers.”
Founded in 1516, Royal Mail employs over 150,000 people. In recent years, it has faced financial struggles due to declining demand for traditional mail, delivery delays, and ongoing strikes over wages. Adding to its challenges, the UK’s telecommunications regulator recently fined the company £10.5 million for failing to meet delivery standards.
In addition to Royal Mail, IDS owns the profitable GLS parcel network, a key international logistics operator.
Analysts view the acquisition as part of EP Group’s broader strategy of investing in undervalued sectors undergoing systemic change. “EP Group continues to target sectors facing structural challenges, acquiring assets at prices significantly below book value,” said analyst Radim Dohnal. He added that while privatization efforts in rail infrastructure have been met with skepticism, the government’s approval of this deal highlights EP Group’s positioning as a credible partner.
The acquisition solidifies Daniel Křetínský’s growing footprint in the UK market. Through his Energetický a průmyslový holding (EPH), Křetínský has recently expanded into the British energy sector, purchasing a 50% stake in West Burton Energy, which operates a 1.3 GW gas power plant and a 49 MW battery storage facility.
EPH’s acquisition, executed through its UK subsidiary EP UK Investments (EPUKI), reflects a strategic partnership with TotalEnergies, which retains the other 50% share. Jan Špringl, EPH board member, highlighted the collaboration: “Our partnership with TotalEnergies, a leader in renewables and flexible energy solutions, will help further develop the facility and support its employees.”
Daniel Křetínský, one of the richest Czechs with an estimated fortune of CZK 290 billion according to Forbes, leads the EP Group, which spans energy, media, and logistics. The group comprises over 70 companies across Europe, including EP Infrastructure and EP Power Europe. Křetínský also owns stakes in major European assets and operates under the parent entity EPCG, where he holds 89.3% of shares.
The Royal Mail deal marks a pivotal moment in EP Group’s expansion, combining historic legacy with a vision for modernization and long-term sustainability.
Source: CTK
