Royal Mail owner International Distribution Services PLC (LSE:IDS)’s takeover by Czech billionaire Daniel Kretinsky has been approved by the government.
IDS on Monday announced it had entered into legally binding undertakings with Kretinsky’s EP Group over the £3.6 billion deal after consultations with the government.
This will see the postal service enter into foreign ownership for the first time after the government had reviewed the bid under national security laws.
Among conditions, the government will hold a so-called “golden share” allowing it to approve major changes around IDS’ ownership, headquarters and tax residency.
Royal Mail’s universal service obligation, enforcing letter deliveries for six days a week, will also remain in place.
Commitments had been made to unions too for workers to get a 10% share of dividends paid out under Kretinsky.
Kretinsky had launched the bid in May to buy the remaining 73% of Royal Mail that he didn’t already own for 360p a share.
IDS non-executive chair Keith Williams commented: “The IDS board welcomes the government’s endorsement and legal backing for the comprehensive package of undertakings and commitments we negotiated.
“These provide our customers, colleagues, unions, regulators and broader stakeholders with safeguards for the provision of the universal service obligation, the ongoing financial stability of Royal Mail, the maintenance of colleague benefits, and Royal Mail’s broader role in the United Kingdom.”
IDS shares gained 1% to reach 362.40p on Monday.