The Start of a New Chapter for Royal Mail
The UK’s iconic postal service, Royal Mail, is set for a significant transformation following the government’s approval of its parent company’s £3.6 billion takeover by Czech billionaire Daniel Kretinsky’s EP Group.
This landmark deal, subject to legally binding commitments, ensures that Royal Mail retains its identity and its role as a vital national service. The government retains a “golden share” to oversee critical changes, safeguarding Royal Mail’s UK headquarters, tax residency, and Universal Service Obligation (USO).
Commitment to Universal Service and Modernization
As part of the agreement, EP Group has pledged to uphold the USO, which mandates six-day-a-week letter deliveries and five-day parcel services. Kretinsky has publicly affirmed his personal dedication to maintaining the service, stating, “For as long as I am alive.”
The USO, however, is under review as Royal Mail explores cost-saving measures, including reducing second-class letter deliveries to alternate days—a move that could save £300 million annually.
Business Secretary Jonathan Reynolds emphasized the government’s dedication to a financially stable and community-connected Royal Mail. Meanwhile, Kretinsky highlighted EP Group’s long-term vision to modernize Royal Mail into a world-class postal operator with enhanced services.
Benefits for Workers and Unions
In a bid to strengthen ties with employees, EP Group has committed to giving workers a 10% share of dividends paid out to Kretinsky. Additionally, a worker representation group will meet monthly with Royal Mail’s directors, ensuring that employees have a greater say in the company’s operations.
Challenges Ahead: Reviving Royal Mail’s Performance
Royal Mail faces the daunting task of reversing years of decline, including recent delivery failures that led to a £10.5 million fine by regulator Ofcom. Letter volumes have halved since 2011, while the demand for parcel deliveries continues to grow.
Royal Mail’s financial performance has been buoyed by its international logistics arms in Germany and Canada, which offset domestic losses. Kretinsky has announced plans to invest in delivery lockers across the UK, mirroring successful strategies in other European markets.
A Controversial Yet Strategic Move
The deal was scrutinized under national security laws, with Kretinsky’s energy ties and his stake in Russian gas transportation coming under the spotlight. However, the government deemed his business dealings legitimate after a thorough review.
Kretinsky, already a prominent investor in the UK with stakes in Sainsbury’s and West Ham United, has diversified his portfolio beyond energy into retail, logistics, and sports.
The Road Ahead for Royal Mail
As Kretinsky takes the reins, Royal Mail’s focus will shift toward modernization, sustainability, and operational efficiency. With support from its new ownership, Royal Mail is poised to redefine its role in an increasingly digital world, balancing tradition with innovation.
The stage is set for a bold transformation—one that could secure Royal Mail’s place as a modern, globally competitive postal service while maintaining its cherished connection to communities across the UK.
BBC NEWS, CNN
