Chancellor Jeremy Hunt has urged regulators to closely examine Daniel Kretinsky's proposed £3.6bn takeover of Royal Mail, amid concerns about the potential break-up of the iconic postal service.
Hunt stressed the importance of extending the guarantees currently promised by Kretinsky beyond their initial periods.
Speaking to LBC, Hunt highlighted the possibility of extending legally binding commitments made by Kretinsky, whose company EP Group is Royal Mail's largest shareholder. “It is entirely possible that we could decide that we should extend it beyond that, but that would be for three years,” he noted.
Kretinsky's assurances, part of his pitch, include a promise not to spin off Royal Mail's profitable parcels business, GLS, from its struggling letters division. However, this guarantee is only valid for three years after the conclusion of the deal, which causes concern about the future structure of the company.
In addition, Kretinsky has committed to maintaining several key Royal Mail services for five years. These services include a one price anywhere system and Saturday delivery for first class mail. Other promises include maintaining the Royal Mail brand, protecting staff pensions, maintaining UK headquarters and tax residency, and continuing to recognize existing unions.
This acquisition represents the first time in its 500-year history that Royal Mail will be under foreign ownership. Kretinsky, who also has significant investments in Sainsbury's FC and West Ham Football Club, stressed that his aim was not to get rid of GLS but to potentially acquire additional companies to boost the business. He pointed out that “Royal Mail is moving strategically in the right direction, but not at the right speed.”
The deal is set to be subject to review under the UK's national security laws, given concerns about the impact on critical infrastructure. Hunt reassured the public that essential services, such as six-day deliveries, would be maintained. “We will absolutely make sure we protect what people want from Royal Mail,” he said.
These sentiments were echoed by Labor, who committed to reviewing the deal and supporting key Royal Mail services.
Addressing concerns about foreign ownership of national assets, Hunt stressed the need for international investment to modernize the UK economy. “I believe that in order for our economy to be modernized, we need to attract investment from all over the world,” he said. “We grew faster than other European economies because we were more open to investment.”
While the government and regulators consider the details of the takeover, the focus remains on ensuring Royal Mail continues to serve the public effectively while protecting national interests.
