The owners of Royal Mail have agreed to a multi-billion pound takeover bid by Czech billionaire Daniel Kretinsky.
The company’s parent International Distribution Services (IDS) said its board of directors approved the deal after a A formal offer was made earlier this month.
It said the agreement included a range of “contractual obligations” to protect the public service aspects of Royal Mail – such as the universal service obligation for first class mail, six days a week.
The £3.6 billion takeover deal values the company at £5.3 billion, including debt.
Mr Kretinsky’s EP group already owns 27.6% of the business.
Shareholders will vote on the deal at IDS’s next annual general meeting in September.
The takeover is also expected to come under heavy scrutiny from regulators before it can go ahead.
The billionaire, who has been nicknamed the ‘Czech Sphinx’ reportedly due to his enigmatic nature and reluctance to speak in public, also owns parts of West Ham Football Club And Sainsbury’s.
Read more: Many are baffled as to why a Czech billionaire would want to buy out the owner of Royal Mail
The offer would see EP Group buy IDS for 370p per share.
IDS said Royal Mail would keep the company’s brand name and UK headquarters under the deal.
The company also insisted that the employment rights of all staff would be protected and that there was “no intention to make any material changes to the overall workforce or to reduce the number of frontline workers”.
Unions and senior politicians have previously expressed concerns about the possible takeover of the postal service, which was privatized in 2013.
The Labor Party previously called for a commitment that Royal Mail would remain based in Britain and continue to pay taxes here as part of any deal.
Photo: PA
Commenting on the announcement on Wednesday, Shadow Secretary Jonathan Reynolds said: “These assurances are welcome that Royal Mail will maintain its British identity and protect its workforce without redundancies.
“Labour in government will ensure these are adhered to.”
Business secretary Kemi Badenoch met IDS bosses earlier this month for talks on the takeover, and is said to have urged its representatives to ensure services for the vulnerable, people in remote areas and small businesses, were protected.
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General secretary of the Communication Workers Union, Dave Ward, said: “We welcome some of the commitments that have been made, but the reality is that postal workers in the UK have lost all confidence in Royal Mail’s senior management and the agency is deliberately run down.
“We will meet the EP Group next week and call for a complete reset of employee and industrial relations, the restoration of postal services and further commitments on the future of the company.”
He added: “We will also work directly with the Labor Party and other stakeholders to call for a new ownership model for Royal Mail, where our members and customers have a direct say in key decisions.”
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Mr. Kretinsky described the Royal mail as “part of the fabric of British society and has been for hundreds of years”.
He added: “The EP Group has the utmost respect for the history and tradition of Royal Mail, and I know that owning this company comes with a huge responsibility – not only to the employees, but also to the citizens who rely on her services every day.”
It comes after the Royal Mail came forward proposed shake-up plans to Ofcom as part of its turnaround efforts, including scaling back some deliveries.
The regulator also recently launched an investigation after the company said it delivered less than three-quarters of its first-class mail on time last year.