Royal Mail takeover receives national security thumbs up
Share:
Daniel Kretinsky's acquisition of Royal Mail is getting closer to realisation after gaining national security clearance from the UK Government on Friday. Pat McFadden, the Chancellor of the Duchy of Lancaster, has approved the takeover under the National Security and Investment Act.
Royal Mail's parent company, International Distribution Services (IDS), agreed in May to a £3.6billion acquisition by Kretinsky's EP Group. The proposed deal has generated considerable controversy, partly because of Royal Mail's role in the UK's communications infrastructure and Kretinsky's commercial ties in Russia.
The Czech billionaire's interests include a 49 per cent holding in EUStream, which transports gas from Russia to Central and Eastern Europe via Slovakia. Under a contract with Gazprom lasting until 2028, EP receives income from the state-owned energy giant for supplying Russian gas across Europe. The arrangement is legal under European Union laws.
Approval: Daniel Kretinsky's acquisition of Royal Mail is getting closer to realisation after gaining national security clearance from the UK Government. The Cabinet Office said EP Group's IDS acquisition is 'subject to the parties ensuring that Royal Mail Group remains able to and continues to provide services that are in support of UK national security'.
Shareholders in IDS now need to vote in favour of the deal before it can be finalised. Besides security concerns, the transaction has come under heavy criticism as it is being financed with £3billion of high-interest loans and IDS already has £2billion in debts.
