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The sale of Royal Mail to Czech billionaire Daniel Křetínský has been approved by the UK government, paving the way for the former state-owned postal service provider to become foreign owned.
The go-ahead for Křetínský’s £5.3bn takeover of Royal Mail owner International Distribution Services will be announced on Monday morning, according to people familiar with the matter.
The two sides had reached a deal in May that received management backing, but were still waiting for an official green light.
Křetínský’s PE Group had become embroiled in late negotiations with officials and the postal workers’ union as they sought further guarantees over the transaction.
The initial agreement to acquire Royal Mail included several commitments, including maintaining its headquarters in the United Kingdom, recognizing the postal workers’ union and maintaining the obligation to deliver mail throughout the United Kingdom at the same cost.
As part of the final deal, the U.K. government will retain a so-called “golden share” in the postal service, giving it special rights over the management of the company, the people said.
Křetínský, known for his investments in British supermarket chain J Sainsbury and football club West Ham United, also previously pledged to respect delivery obligations that Royal Mail has long warned are holding back its service.
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.
The group delivered only 74.7 percent of first-class mail within one business day of collection, and 92.7 percent of second-class mail within three business days, the industry regulator found of communications, Ofcom.
Those levels are well below the targets of 93 percent and 98.5 percent, respectively.
The latest sanction highlights the challenge facing Křetínský, who has pledged to modernize Royal Mail after years of strained relations with postal workers and struggles to adapt to the rise of online shopping.
The government and Křetínský declined to comment. An IDS representative did not immediately respond to a request for comment after business hours. The BBC previously reported on the government’s approval.
