ROYALMAIL.EPGROUP (WPI)

MLEX.CASEFILE    The EU case file number is M.11625

Křetínský’s EP Group seeks EU approval to buy Royal Mail owner

(November 28, 2024, 16:45 GMT | Insight) — EP Group, an investment company controlled by Czech billionaire Daniel Křetínský, has requested EU approval to buy the owner of the UK’s Royal Mail.    The European Commission has set an initial Jan. 13 deadline to decide on the takeover, according to an update on its register of notified deals. International Distribution Services owns Royal Mail, the more than 500-year-old postal service in the UK. It also owns General Logistics Systems, one of the largest parcel services providers in Europe.   EP Group made an offer to acquire IDS in May for an enterprise value of 5.3 billion pounds ($6.7 billion).   The deal is currently undergoing a national security probe in the UK, including scrutiny of any potential links to Russia. This week UK business minister Jonathan Reynolds rebuffed a question regarding business dealing with Russia, describing Křetínský as “a legitimate business figure [with] a number of business interests in Europe and the UK” (see here).    Křetínský controls an “extensive portfolio of significant industrial assets across Europe and is a long-term investor in the UK and Europe,” according to a description of the deal by EP Group and published by the commission….Those include energy and infrastructure assets such as gas pipelines and power plants, food wholesale and retail, logistics, media and e-commerce, the document said.  The commission’s phase I investigation will be extended by 10 working days if EP Group offers remedies to address competition concerns

The buyout of International Distribution Services appears more likely to gain national security approval in the UK, after the business minister (sosbt) described the Czech investor seeking to buy the Royal Mail owner as a “legitimate business figure.”

Daniel Křetínský’s bid through EP UK is undergoing a national security probe, including scrutiny of any potential links to Russia, following his 3.6 billion-pound ($4.6 billion) cash offer for the company in May (see here).

Křetínský’s investment vehicle, Vesa Equity, already owns about 27.6 percent of IDS and the holding was reviewed on national security grounds and cleared in 2022.

Business minister Jonathan Reynolds yesterday rebuffed a question regarding business dealings with Russia from a member of a Parliamentary committee in London.

“Mr Křetínský is of course the principal shareholder in Royal Mail and has already been through a National Security and Investment Act process. I would simply say if there were anything of the like that you describe in terms of links to Russia, I would have hoped that wouldn’t have resulted in him becoming the principal shareholder,” Reynolds told the committee.

“He is a legitimate business figure who has a number of business interests in Europe and the UK,” Reynolds said.

The national security review is being undertaken by the Cabinet Office, and Reynolds said he couldn’t comment on the timing of a decision.

Křetínský’s other UK investments include stakes in West Ham United Football Club and supermarket chain J. Sainsbury.

 

UK’s Royal Mail sale could see new structure to give workers a voice, Labour says

 
(June 13, 2024, 15:13 GMT | Insight) — Royal Mail’s takeover would be closely reviewed and the company could get a new governance structure to give employees and customers a greater say on the strategy of the UK postal service, the Labour Party said.  
Labour, which is forecast to become the next government after the July 4 election, pledged to “robustly” scrutinize the planned sale of International Distribution Services to Czech billionaire Daniel Křetínský. The interests of the workforce, consumers and the service would be protected, it said in its manifesto today.   The party, will also “explore new business and governance models for Royal Mail so that workers and customers who rely on Royal Mail services can have a stronger voice in the governance and strategic direction of the company,” Labour said.

IDS, which owns international parcels network GLS and the postal service, last month accepted a 3.6 billion-pound ($4.6 billion) cash offer from EP UK, controlled by businessman and lawyer Křetínský. The buyout of Britain’s 500-year-old postal service will need national securities clearance and antitrust approvals in several countries (see here). The comments in the manifesto follow pressure from Communication Workers Union general secretary Dave Ward for changes to the company structure, in response to the deal. The CWU, which is affiliated to Labour, said last month it would ask the party for “a new model of ownership for Royal Mail,” in which its members and customers have a “direct say in key decisions.”…..The CWU also urged Labour to consider creating a “golden share” for the Royal Mail, which would entitle the holder to special rights over other investors, to protect the national infrastructure.

Royal Mail owner IDS says Křetínský deal will need clearances in several countries

 
(May 29, 2024, 10:44 GMT | Insight) — Royal Mail owner International Distributions Services said its acquisition by a Czech billionaire Daniel Křetínský will need UK national securities clearance and antitrust approval in several countries….IDS, which owns international parcels network GLS and the postal service, today accepted a 3.6 billion-pound ($4.6 billion) cash offer from EP UK, controlled by businessman and lawyer Křetínský.   The deal is conditional on antitrust clearance in Canada, the US, UK, EU and Serbia, according to an IDS filing today. The transaction will also need national security approval in the UK, foreign direct investment clearances in the US, Austria, Canada, Denmark, Germany, Romania, and other possible third-party clearances….The acquisition would not be opposed in principle, but would face a normal procedure, UK Chancellor Jeremy Hunt reportedly said earlier this month, under the National Security and Investment Act….  “The IDS board has negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards,” IDS Chair Keith Williams said.

EP will offer to continue to provide a universal “one-price-goes-anywhere postal service, keep Royal Mail’s head office and tax residency in the UK, and provide labor union recognition, IDS said. However, these undertakings are only for five years after the completion of the deal, which the company expects in the first quarter of 2025….Jonathan Reynolds, the business secretary for the Labour Party — which is forecast to win the UK general election next month — said that he welcomed the assurances provided by Křetínský, Reuters reported…..Křetínský’s investment vehicle, Vesa Equity, already owns 27.6 percent of IDS. The holding was called in for a full national security assessment in 2022, but the government decided that no action was necessary. His other UK investments include stakes in West Ham United Football Club and supermarket chain J. Sainsbury

Royal Mail-owner IDS says Czech billionaire bidder would seek to protect ‘public interest’

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