A Czech billionaire’s planned £3.6bn takeover of Royal Mail’s parent company will face scrutiny under government security rules, it has been reported.
The PA news agency said it understood the Cabinet Office was considering Daniel Kretinsky’s bid to take full control of the company under the National Security and Investment (NSI) Act.
It gives the government the power to assess potential economic and national security concerns.
Government officials could block a deal or request specific commitments from the suitor if the review raised major concerns.
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The BBC reported that potential links to Russia would also be included in the investigation due to the tycoon’s interests in gas pipelines in the country.
A previous study by the then conservative government had already authorized the purchase of shares by Kretinsky, which made him the largest investor in International Distribution Services (IDS), owner of Royal Mail.
IDS agreed to an acquisition by Kretinsky’s PE Group in May. It’s naturally controversial given the role Royal Mail plays across the UK.
IDS previously said that if the deal goes through, the new owner will retain its existing UK tax residence, registered office, brand and employment rights.
PE Group ownership would also include a commitment to the current Royal Mail universal first-class mail service obligation at a single price, to anywhere, six days a week, the company said.
It added that the new owner had “no intention of making any material changes to the total number of employees or reductions in the number of frontline workers” beyond existing plans.
Royal Mail alone employs more than 110,000 people.
The delivery staff union, the CWU, is wary of the takeover and has also opposed Royal Mail’s plans to dilute its universal service obligation for cost reasons if the acquisition fails.
CWU leader Dave Ward called on the EP group to expand its commitments to the workforce and welcomed the prospect of the Cabinet Office investigation.
See more information:
Why does a Czech billionaire want to buy the owner of Royal Mail?
For his part, Kretinsky, who is already a 27% shareholder in IDS, promised that the company would be safe in his hands.
He said in June that EP has “decades of experience in owning critical national infrastructure” and that IDS could “become one of the largest postal logistics groups in Europe”.
“The PE Group has the utmost respect for the history and tradition of Royal Mail, and I know that owning this business will come with a huge responsibility – not just for the employees, but for the citizens who depend on its services every day,” he added.
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Neither the EP nor the Cabinet Office have commented on the ongoing review.
It is expected to take around two months to complete.
This story originally appeared on News.sky.com read the full story
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