LONDON

In a groundbreaking decision, the U.K. government has officially approved the US$4.6 billion acquisition of Royal Mail's parent company by Czech billionaire Daniel Kretinsky. This monumental move marks the first time in 500 years that Britain’s storied postal service will come under foreign ownership.

The deal, valued at approximately 3.6 billion pounds, encompasses International Distribution Services (IDS) and has been anticipated since Kretinsky and IDS reached an agreement back in May. However, it required government clearance under national security legislation due to the postal service’s critical role in the U.K.’s infrastructure.

Despite the change in ownership, Royal Mail will continue to operate from its headquarters in the U.K. The British government has retained a 'golden share' in the company, ensuring that it maintains oversight and the ability to approve any major adjustments regarding ownership, headquarters, and tax residency—key protections amidst the transition.

Business Secretary Jonathan Reynolds hailed the deal as a significant milestone. “We have negotiated something which secures the long-term future of Royal Mail and gives it the fresh start that we need,” he remarked, underscoring the importance of revitalizing this historic institution.

Founded in the 1500s as a royal service, Royal Mail transformed into a public postal service in the 1600s, becoming one of the U.K.'s oldest and most cherished entities. However, in recent years, it faced challenges as digital communication diminished the demand for traditional mailing services, resulting in financial struggles post-privatization in 2013.

Kretinsky, who already owns a 27% stake in IDS, boasts a diverse portfolio across Europe, with significant interests in energy through Eurstream—which manages Russian gas pipelines—and retail investments in major chains such as Sainsbury's. His firm sees IDS not just as a postal service but as a prospective leader in Europe's logistics landscape, aiming to leverage the acquisition to strengthen its competitive position.

While the deal showcases confidence in Royal Mail's future, it is still subject to approval from shareholders, with completion anticipated in early 2025. As this new chapter unfolds, both consumers and industry experts will be watching closely to see how this monumental change impacts service quality and innovation at one of the U.K.’s most iconic institutions.