- The 500-year-old postal service is set to be snapped up in a £3.6bn deal
Royal Mail is set to be taken over by Czech billionaire Daniel Kretinsky – leaving households wondering what the deal means for them.
Royal Mail is currently owned by International Distribution Services (IDS), and last night Labour ministers signed off a £3.6billion takeover deal by Kretinsky.
The deal has been on the table since April to allow Kretinsky’s EP Group to expand his 28 per cent stake in IDS.
The takeover would see Royal Mail have its first non-British owner since it was first founded in the 1500s.
Here is everything you need to know about how the Royal Mail takeover will affect its customers.
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Will the Royal Mail brand change?
No. An express part of the deal is that the brand of the Royal Mail does not change, at least for the next five years.
What could happen to stamp prices?
The price of stamps is not regulated by the deal, and is a decision for the Royal Mail owners to take.
Currently, a first class stamp costs currently £1.65 and a second class one 85p. In 2013, a first class stamp cost 60p and a second class stamp 50p.
Will Royal Mail service levels change?
The most famous Royal Mail promise – that it will charge one price to send anything anywhere in the country – is being kept.
This is known as the ‘one-price-goes-anywhere’, which also sees first class letters delivered six days a week.
In theory, the overall service provided by the Royal Mail has to stay the same or improve under the deal, or the new owners will not make any money.
The deal states that ‘value is not extracted’ unless Royal Mail has either maintained unless RMG has maintained or improved its performance as against its 2023-24 performance.
Last week Royal Mail was slapped with a £10.5million fine by communications regulator Ofcom for failing to meet its delivery targets for both first and second class post.
The postal service legally must deliver 93 per cent of first-class mail within one working day of collection and 98.5 per cent of second-class mail within three working days of collection.
But Ofcom fined Royal Mail after it only delivered 74.7 per cent of first-class mail and 92.7 per cent of second-class post on time between April 2023 and March 2024.
When will the takeover happen?
The deal is still not completely final, as it still needs to be approved by shareholders and unions, and the Competition and Markets Authority may also look into it.
Current shareholders of IDS need to decide if they want to sell their shares or not.
EP Group needs to get 75 per cent of IDS to complete the deal.
But the Government has said it has no objection to the deal, which could complete as early as the first quarter of 2025.
What will happen to Royal Mail staff?
Royal Mail will carry on being based in Britain, ensuring jobs are secure, and tax will be paid in the UK.
EG Group has said any agreements made with postal unions will be honoured, and will not take any surplus cash out of the Royal Mail Pension Plan.
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