BRITAIN'S ROYAL MAIL TAKEOVER BY CZECH BILLIONAIRE GIVEN GO-AHEAD

LONDON, Dec 16 (Bernama-PA Media/dpa) -- Royal Mail's takeover by a Czech billionaire has been given the green light by the British government, allowing the postal service to pass into foreign ownership for the first time, reported PA Media/dpa news.

It is understood that permission for the sale of International Distribution Services (IDS) to Daniel Kretinsky's EP Group is set to be officially announced later on Monday morning after being reviewed by the government under the National Security and Investment Act.

Kretinsky and IDS agreed a deal in May but have been waiting for approval from the government, which must sanction the takeover given the national importance of Royal Mail and the postal service in the UK.

There were already a number of pledges made by Kretinsky when the proposed deal was announced, including a vow to keep the brand name and retain Royal Mail's headquarters and tax residency in the UK for the next five years, as well as commitments to protect the company's universal service obligations.

But Kretinsky - who is nicknamed the Czech sphinx - is believed to have made several further concessions to gain government approval, including allowing workers to get a 10 per cent share of any dividends paid to him.

The government will also reportedly keep a so-called "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.

Other previous commitments from Kretinsky include a guarantee not to raid the pensions surplus and to respect union demands for no compulsory redundancies until 2025.

Unions are understood to have been pushing for further assurances and for the commitment over compulsory redundancies to be extended.

On Friday, Royal Mail was fined £10.5 million ($13.3 million) by regulator Ofcom for missing its post-delivery targets in the 2023-2024 financial year.

The watchdog said just under three-quarters of first-class post was delivered on time during the period, well short of its 93 per cent target, and 92.7 per cent of second-class post was delivered on time, below its 98.5 per cent target.

The fine is the second in two years, after the watchdog also gave Royal Mail a £5.6 million penalty in November 2023.

Ofcom chief executive Melanie Dawes, told "BBC Breakfast" on Monday: "The government has obviously cleared the deal today, but Ofcom's focus is to make sure that Royal Mail delivers for its customers."

She said there are "real questions about what the service needs to be, going into the future."

"We will be coming forward next year with proposals to make sure that it is sustainable, and absolutely we will hold Royal Mail to account in delivering - whatever that final outcome is," she said.

Dawes added: "Ultimately though it is up to the company, under their new ownership, to deliver now.

"They've got a lot of changes that they need to make, some of that is because the letter business is changing so much.

"We understand that that is hard, but they've got to get on with it to make sure they continue to deliver for the public and do so better than they have done in recent years, to be honest."

--BERNAMA-PA MEDIA/dpa