Cabinet Office ‘calls in’ Czech billionaire’s £3.57bn Royal Mail takeover

The Government has launched a review process into the bid under the National Security and Investment (NSI) act.

The Government has called in the takeover deal of Royal Mail owner IDS (John Giles/PA) (PA Archive)

Czech billionaire Daniel Kretinsky’s £3.57 billion takeover deal for the owner of Royal Mail has been called in by the UK government under security rules.

International Distribution Services, the parent company of Royal Mail, agreed a takeover deal by Mr Kretinsky’s EP Group in May.

The PA news agency understands that the Cabinet Office has now launched a review process into the bid under the National Security and Investment (NSI) act.

Mr Kretinsky’s EP Group and the Cabinet Office declined to comment.

The process will assess whether the sale to Mr Kretinsky, who is already IDS’s largest shareholder, could affect the UK’s economic infrastructure or pose a security risk.

The BBC reported that Government officials will particularly look into links to Russia, with the billionaire investor owning stake in a major gas pipeline from Russia to Europe.

Government officials could block a deal or ask for specific commitments from the suitor if the review raises major concerns.

The review process is expected to take up to two months.

Sources close to the process told PA that a review under the NSI act is “not a surprise”, with the Government taking a similar process when Mr Kretinsky increased his shareholding in Royal Mail’s owner to 27.5% in 2022.

Last week, Labour’s Business Secretary Jonathan Reynolds indicated the new Government was likely to call in the takeover, stressing that we would speak with Mr Kretinsky directly.

Labour’s General Election manifesto pledged that it would “ensure that any proposed takeover is robustly scrutinised”.

Mr Kretinsky has vowed to maintain the service’s requirement to deliver letters six days a week throughout the UK, known as its Universal Service Obligation.

However, last month Martin Seidenberg, IDS’s chief executive, doubled down on the group’s calls to reform the service requirement as letters continue to dwindle.