The UK government has approved the £3.6 billion acquisition of Royal Mail’s parent company, International Distribution Services (IDS), by Czech billionaire Daniel Kretinsky's EP Group. The agreement includes legally binding commitments, ensuring the government retains a "golden share" to oversee key changes such as ownership, headquarters location, and tax residency. EP Group has also pledged to uphold the Universal Service Obligation (USO), requiring six-day-a-week letter deliveries and weekday parcel services.

Mr Kretinsky, who has emphasised his long-term commitment to Royal Mail, assured the continuation of the USO "for as long as I am alive." Royal Mail has proposed potential changes to the service, such as reducing second-class deliveries to alternate weekdays, which it claims could save £300 million annually. Business Secretary Jonathan Reynolds welcomed the deal, highlighting its role in stabilising Royal Mail and maintaining vital connections for remote communities.

As part of the agreement, EP Group will preserve the Royal Mail brand and keep its headquarters and tax residency in the UK for at least five years. The company has also committed to fostering better relations with its workforce by introducing a workers' group and sharing 10% of dividends with employees. Investments in modernisation, including delivery lockers, are also planned to enhance efficiency.

Royal Mail, which has struggled with financial losses and falling letter volumes, was recently fined £10.5 million by Ofcom for missed delivery targets. The regulator has called on the new ownership to drive meaningful improvements, with long-term sustainability and service adjustments expected to be key considerations moving forward.