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The sale of Royal Mail to Czech billionaire Daniil Kretinski has been approved by the UK government, paving the way for the former state-owned postal service provider to transition to foreign ownership.
The green light for Křetínský's £5.3bn takeover of Royal Mail owner International Distribution Services is set to be announced on Monday morning, according to people familiar with the matter.
I had two sides A deal was agreed in May Which had the administration's support, but was still waiting for the official green light.
Křetínský's EP group was engaged in late negotiations with officials and the postal workers' union as they sought further guarantees on the deal.
The initial agreement to take over Royal Mail came with various commitments, including retaining its UK headquarters, recognizing the postal workers' union and maintaining a commitment to deliver mail everywhere in the UK at the same cost.
As part of the final agreement, the UK government will retain a so-called “golden share” in the postal service, giving it special rights to run the company, the sources said.
Křetínský, known for its investments in UK supermarket chain J Sainsbury's and football club West Ham United, has also previously committed to honoring delivery commitments that Royal Mail has long warned were hampering its services.
Earlier this month UK regulators fined Royal Mail £10.5 million after the group failed to meet its performance targets, increasing pressure on the postal service.
Telecommunications industry regulator Ofcom found that the group delivered only 74.7 per cent of first class mail within one working day of receiving it, and 92.7 per cent of second class mail within three working days.
These levels are well below the targets of 93 percent and 98.5 percent, respectively.
The latest punishment highlights the challenge facing Kretinsky, who has pledged to modernize Royal Mail after years of fraught relations with postal workers and struggles to adapt to the rise of online shopping.
The government and Kretinsky declined to comment. An IDS representative did not immediately respond to a request for comment outside business hours. The BBC had previously reported the government's approval.
