Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The sale of Royal Mail to Czech billionaire Daniel Křetínský has been approved by the UK government, paving the way for the formerly state-owned postal service provider to pass into foreign ownership.
The go-ahead 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.
The two sides had agreed a deal in May that received management backing, but had still been awaiting an official green light.
Křetínský’s EP Group had been locked in late negotiations with officials and the postal workers’ union as they sought further assurances about the transaction.
The initial agreement to acquire Royal Mail came with various commitments, including keeping its UK headquarters, recognising the postal workers’ union and maintaining the obligation to deliver mail everywhere in the UK at the same cost.
As part of the final deal, the UK government will retain a so-called “golden share” in the postal service giving it special rights over the governance of the company, the people said.
Křetínský, known for his investments in UK supermarket chain J Sainsbury and football club West Ham United, has also previously made a commitment to respect the delivery obligations that Royal Mail has long warned are holding back its service.
Earlier this month UK regulators fined the Royal Mail £10.5mn after the group failed to meet its performance targets, adding to pressure on the postal service.
The group delivered just 74.7 per cent of first-class mail within one working day of collection, and 92.7 per cent of second-class post within three working days, the communications industry regulator Ofcom found.
Those levels are well below targets of 93 per cent and 98.5 per cent, respectively.
The latest penalty highlights the challenge facing Křetínský, who has pledged to modernise Royal Mail following years of fraught relations with postal workers and struggles to adapt to the rise of online shopping.
The government and Křetínský declined to comment. A representative for IDS did not immediately respond to a request for comment outside business hours. The BBC previously reported the government’s approval.