CWU and EP LTB 393/24 – ROYAL MAIL GROUP TAKEOVER BID

[Barnacle]

DPR never made sense. I would love to know who’s idea it was.

Sorry it's off topic but just remembered one of their previous 'good' ideas that didn't see the light of day, it was to merge two delivery offices and the frames would be fitted with revolving labels like James Bond's number plates so once one office had been and gone out the other office could prep their duties
[/quote]

that’s hilarious that someone up top suggested that out loud

[postslippete]

That was the plan, yes. But I don’t think it will ever happen. Not least just for purely practical reasons, such as RM’s core network not being equipped for moving or handling XL consignments. PFW will be sold off at the earliest possible opportunity as a loss-making subsidiary to some venture capitalists who will rebrand it as a large and heavy niche provider. “RM Letters” has no choice but to concentrate on next-day/overnight parcels for itself alone if it wants to continue to exist.

The business has always wanted a single optimised parcel network. Obviously, having both RM and Parcelforce cover the same ground adds both cost and inefficiency as an overall business as well as increasing our carbon footprint. Rico Back wanted to create a new legal trading entity for Parcelforce and invoke TUPE and I have a feeling that PWF may be sold off in the long term. We seem to be taking on board many of the larger parcels and PWF appears to be deliberately run very inefficiently.

None of the above comments about Parcelforce make any sense ,
They have been trialing taking royal mail parcels for the last 6 months and the trials are going well ,
also they have recently bought brand new vans , Why would you do that if you are running the company down ready to sell ?
They also have 25% owner drivers that can deliver the parcels cheaper , and last time it was mentioned Parcel force was not losing money it was breaking even , How much money are the inefficient DPR routes losing ? .

Whilst anyone can see that it makes sense for Parcelforce to take the bulky parcels in their larger vans and RM to take the smaller parcels; what might not make sense for a new business owner is keeping the two businesses as two sets of systems. RM have also bought new vans which are bigger and there is no doubt that there are many larger parcels that have been coming into our network in the last few years. We don't deliver many fridges and washing machines but is there any money in it?

I spoke to a Parcelforce guy the other week and he was delivering a lot of smaller items which he had to drive to another depot over an hour away to pick up which doesn't make a lot of sense to me. He spoke about working long hours and some incentive based on price per parcel? The question of whether Parcelforce can remain profitable may rely on this and whether there are more owner drivers who can deliver parcels more cheaply?

The question of whether DPR is cost effective to RM is ongoing but there is no doubt that we are transitioning towards a parcels company. Amazon and DPD often deliver up to 8pm 7 days a week so that would suggest to me that the work is there.

[oypostie]

Amazon and DPD often deliver up to 8pm 7 days a week so that would suggest to me that the work is there.

or that they don't employ enough staff

[Smoothbackground]

That was the plan, yes. But I don’t think it will ever happen. Not least just for purely practical reasons, such as RM’s core network not being equipped for moving or handling XL consignments. PFW will be sold off at the earliest possible opportunity as a loss-making subsidiary to some venture capitalists who will rebrand it as a large and heavy niche provider. “RM Letters” has no choice but to concentrate on next-day/overnight parcels for itself alone if it wants to continue to exist.

The business has always wanted a single optimised parcel network. Obviously, having both RM and Parcelforce cover the same ground adds both cost and inefficiency as an overall business as well as increasing our carbon footprint. Rico Back wanted to create a new legal trading entity for Parcelforce and invoke TUPE and I have a feeling that PWF may be sold off in the long term. We seem to be taking on board many of the larger parcels and PWF appears to be deliberately run very inefficiently.

None of the above comments about Parcelforce make any sense ,
They have been trialing taking royal mail parcels for the last 6 months and the trials are going well ,
also they have recently bought brand new vans , Why would you do that if you are running the company down ready to sell ?
They also have 25% owner drivers that can deliver the parcels cheaper , and last time it was mentioned Parcel force was not losing money it was breaking even , How much money are the inefficient DPR routes losing ? .

You don’t run a company down to sell it. To use a corner shop analogy, the shopkeeper invariably refurbishes and refits his shop prior to putting it on the market and selling it so that he gains the best achievable sale price. RM will be similarly tarting up PFW. All those RM parcels will artificially increase the traffic volumes passing through the PFW ecosystem, and that will translate into the balance sheet and the company’s financials, thus presenting PFW in a rosey light to prospective purchasers. Vans are assets, albeit depreciating ones, and are also an essential tool for last-mile delivery, so you can’t read anything into that.

[Smoothbackground]

That was the plan, yes. But I don’t think it will ever happen. Not least just for purely practical reasons, such as RM’s core network not being equipped for moving or handling XL consignments. PFW will be sold off at the earliest possible opportunity as a loss-making subsidiary to some venture capitalists who will rebrand it as a large and heavy niche provider. “RM Letters” has no choice but to concentrate on next-day/overnight parcels for itself alone if it wants to continue to exist.

The business has always wanted a single optimised parcel network. Obviously, having both RM and Parcelforce cover the same ground adds both cost and inefficiency as an overall business as well as increasing our carbon footprint. Rico Back wanted to create a new legal trading entity for Parcelforce and invoke TUPE and I have a feeling that PWF may be sold off in the long term. We seem to be taking on board many of the larger parcels and PWF appears to be deliberately run very inefficiently.

None of the above comments about Parcelforce make any sense ,
They have been trialing taking royal mail parcels for the last 6 months and the trials are going well ,
also they have recently bought brand new vans , Why would you do that if you are running the company down ready to sell ?
They also have 25% owner drivers that can deliver the parcels cheaper , and last time it was mentioned Parcel force was not losing money it was breaking even , How much money are the inefficient DPR routes losing ? .

The calculator broke when they were trying to add up DPR losses.

In the Financial Statement it doesn’t list DPR separately but they know. They make veiled references to parcels being more expensive to deliver than letters and increased staffing costs - DPR has added 30+ staff to our office alone.

Exactly , it makes sense to give Parcelforce anything over shoe box size and get rid of these loss making DPR routes .

DPR never made sense. I would love to know who’s idea it was.

Being a pedant - apologies - but it is whose not who’s.

[Barnacle]

That was the plan, yes. But I don’t think it will ever happen. Not least just for purely practical reasons, such as RM’s core network not being equipped for moving or handling XL consignments. PFW will be sold off at the earliest possible opportunity as a loss-making subsidiary to some venture capitalists who will rebrand it as a large and heavy niche provider. “RM Letters” has no choice but to concentrate on next-day/overnight parcels for itself alone if it wants to continue to exist.

The business has always wanted a single optimised parcel network. Obviously, having both RM and Parcelforce cover the same ground adds both cost and inefficiency as an overall business as well as increasing our carbon footprint. Rico Back wanted to create a new legal trading entity for Parcelforce and invoke TUPE and I have a feeling that PWF may be sold off in the long term. We seem to be taking on board many of the larger parcels and PWF appears to be deliberately run very inefficiently.

None of the above comments about Parcelforce make any sense ,
They have been trialing taking royal mail parcels for the last 6 months and the trials are going well ,
also they have recently bought brand new vans , Why would you do that if you are running the company down ready to sell ?
They also have 25% owner drivers that can deliver the parcels cheaper , and last time it was mentioned Parcel force was not losing money it was breaking even , How much money are the inefficient DPR routes losing ? .

You don’t run a company down to sell it. To use a corner shop analogy, the shopkeeper invariably refurbishes and refits his shop prior to putting it on the market and selling it so that he gains the best achievable sale price. RM will be similarly tarting up PFW. All those RM parcels will artificially increase the traffic volumes passing through the PFW ecosystem, and that will translate into the balance sheet and the company’s financials, thus presenting PFW in a rosey light to prospective purchasers. Vans are assets, albeit depreciating ones, and are also an essential tool for last-mile delivery, so you can’t read anything into that.

EP Group have no plans to break up RM. That means that the activity to reintegrate PFW will march on.

[Barnacle]

That was the plan, yes. But I don’t think it will ever happen. Not least just for purely practical reasons, such as RM’s core network not being equipped for moving or handling XL consignments. PFW will be sold off at the earliest possible opportunity as a loss-making subsidiary to some venture capitalists who will rebrand it as a large and heavy niche provider. “RM Letters” has no choice but to concentrate on next-day/overnight parcels for itself alone if it wants to continue to exist.

The business has always wanted a single optimised parcel network. Obviously, having both RM and Parcelforce cover the same ground adds both cost and inefficiency as an overall business as well as increasing our carbon footprint. Rico Back wanted to create a new legal trading entity for Parcelforce and invoke TUPE and I have a feeling that PWF may be sold off in the long term. We seem to be taking on board many of the larger parcels and PWF appears to be deliberately run very inefficiently.

None of the above comments about Parcelforce make any sense ,
They have been trialing taking royal mail parcels for the last 6 months and the trials are going well ,
also they have recently bought brand new vans , Why would you do that if you are running the company down ready to sell ?
They also have 25% owner drivers that can deliver the parcels cheaper , and last time it was mentioned Parcel force was not losing money it was breaking even , How much money are the inefficient DPR routes losing ? .

The calculator broke when they were trying to add up DPR losses.

In the Financial Statement it doesn’t list DPR separately but they know. They make veiled references to parcels being more expensive to deliver than letters and increased staffing costs - DPR has added 30+ staff to our office alone.

Exactly , it makes sense to give Parcelforce anything over shoe box size and get rid of these loss making DPR routes .

DPR never made sense. I would love to know who’s idea it was.

Being a pedant - apologies - but it is whose not who’s.

There is a word and it does indeed begin with P.

[Dexydog]

Post person?

[yellowbelly]

Being a pedant - apologies - but it is whose not who’s.

'rosey' ?

[A2B]

EP Group have no plans to break up RM. That means that the activity to reintegrate PFW will march on.

You missed out the word immediate

[yellowbelly]

Alex Brummer, Daily Mail, 17th Dec:

These deals aren’t worth the paper they’re written on
I’ve news for the naive ministers who’ve sold off the Royal Mail to a shadowy foreign predator known as the Czech Sphinx...

Daily Mail17 Dec 2024 by Alex Brummer City Editor

TIS the season to be jolly but the Royal Mail doesn’t half make it difficult to bring a smile to one’s lips at this time of year.

The never-ending queues at Post Offices to send parcels to kith and kin, the exorbitant price of a first-class stamp – £1.65! – and the nervous waits at home for online gift deliveries that probably won’t arrive on time are calculated to send anyone’s blood pressure soaring.

And so you could be forgiven for assuming that I would be all in favour of the nation’s privatised postal delivery service being sold to a foreign billionaire.

But the news that the Government has given the green light to a £3.6billion bid for Royal Mail by a ruthless Czech tycoon called Daniel Kretinsky fills me with dread.

It is ludicrous to suggest that lower prices and better services will be the result of handing the command of this great British institution – established during the reign of Henry VIII – to a man so shadowy he is known as ‘the Czech Sphinx’.

Debt

The reverse will be the case because, in order to buy International Distribution Services (IDS) – the publicly listed owner of the Royal Mail – Kretinsky, his backers and a consortium of foreign banks will overload the company with a debt mountain.

And we don’t have to look very far to see how disastrous such loan-fuelled takeovers of public services have proved for British consumers.

Thames Water, which pours sewage into the nation’s most famous river on a daily basis, has been all but destroyed by rapacious foreign investors who loaded it up with £16billion of debt as they simultaneously creamed off tens of millions of pounds in dividends and directors’ fees.

In the same way, overseas ownership of many of the rail franchises is among the reasons why Keir Starmer’s deeply underwhelming Government has decided to take train services back into public ownership as their companies’ contracts expire, with a Bill to create Great British Railways.

I am all the more disappointed because I have long campaigned against the government selling off our public utilities and very best technology companies to foreign owners. And I had hoped that the National Security & Investments Act, which became law in 2021, would finally end the scandal of Britain auctioning its commercial crown jewels to the highest overseas bidder.

The new Act, modelled on the US’s robust Committee on Foreign Investment, offered the promise of a new era in which public services would be prioritised over unsuitable ownership, vital strategic interests preserved and cutting-edge technologies and patents, often the product of our tremendous research universities, saved for the nation.

After all, in America, an effort by Japan’s Nippon Steel to buy Pittsburgh-based US Steel, is currently marooned due to strategic and political concerns about the takeover, even though Tokyo is among Washington’s staunchest allies.

No such luck on this side of the pond. Yesterday, we learned that Labour’s Business Secretary Jonathan Reynolds is allowing the £3.6billion (£5.3billion including existing debt) Czech bid for Royal Mail to go ahead after Kretinsky’s consortium offered a wide range of undertakings.

These include pledges not to make cuts to the highly unionised workforce, to abide by the Universal Service Obligation (primarily next-day, first-class deliveries) and maintain a UK headquarters for five years – the blink of an eye in the Royal Mail’s 500-year history.

I have news for Reynolds. Such deals are not worth the paper they are written on. Over the past several decades we have seen foreign private equity and overseas buyers run roughshod over similar agreements.

In some cases, assets have been sold off to third parties within weeks of deals being completed, with the guts of the enterprise together with all its decision-making functions moved overseas, leaving only ‘brass plate’ headquarters in the country of origin.

The Government is trumpeting that it is retaining a ‘golden share’ which will give it control over any major governance changes. That, too, is a charade. When economic and commercial conditions change, as they do after shocks such as the pandemic, all bets are off and business owners abrogate promises made in the heat of a takeover.

Bad industrial relations are likely to be a problem too. Ever since the privatisation of Royal Mail, conducted by then Lib Dem Business Secretary Vince Cable and the Coalition government in 2012, relations between management and the principal employee group, the Communication Workers Union (CWU), have been fraught.

Postal volumes had plunged following the introduction of email and text messaging but the CWU staunchly resisted job cuts and any form of modernisation, such as mechanical sorting, that might have an impact on workforce numbers.

Paymasters

And it looks like Labour insisted on maintaining that deeply inefficient status quo for the workers in return for giving the deal the go-ahead.

We have seen from almost the first days of Labour’s return to Downing Street how susceptible the Government is to demands from its union paymasters.

One of its first acts was to dish out £9.4billion of above-inflation pay settlements to public sector unions and the railway workers without being given any assurances on productivity improvements. In the course of the acquisition process, Kretinsky has had talks with the CWU and bought their support with promises of no redundancies, no watering down of union rights and regular above inflation pay increases. It is the kind of ‘peace’ deal which Reynolds and Labour couldn’t fail to find attractive.

However, such extravagant promises will come at the cost of future investment. To buy the Royal Mail, the Kretinsky consortium is to take on £3billion of extra debt, largely from overseas banks such as France’s BNP Paribas.

That will lift the company’s overall debt burden to more than £5billion. This means that large amounts of cash paid by ordinary Britons for postage stamps and delivery services will leave the Royal Mail by the back door to feed its voracious creditors instead of being invested in improved services.

Barriers

Highly indebted takeovers of supermarket groups, such as Morrisons and Asda, have seen them struggling ever since because of colossal interest rate bills. This has allowed rivals such as Tesco, Sainsbury’s and the German-owned Lidl and Aldi to advance at their expense.

An infinitely better solution in the case of Royal Mail would surely be for the board of its parent company IDS to deal with its underlying problems by bringing in fresh, more able executives, harness the benefits offered by AI and new technology and tackle the union barriers to reform.

Instead, the government has opted for the easy option of letting it fall into overseas hands.

There can be no greater betrayal of a totemic British company, one that is the custodian of postage stamps bearing the King’s head and of bright red pillar boxes adorned with the royal ciphers, and the employer of indefatigable posties who can be relied upon to pound the streets and trudge up our garden paths whatever the weather.

[Barnacle]

Alex Brummer, Daily Mail, 17th Dec:

These deals aren’t worth the paper they’re written on
I’ve news for the naive ministers who’ve sold off the Royal Mail to a shadowy foreign predator known as the Czech Sphinx...

Daily Mail17 Dec 2024 by Alex Brummer City Editor

TIS the season to be jolly but the Royal Mail doesn’t half make it difficult to bring a smile to one’s lips at this time of year.

The never-ending queues at Post Offices to send parcels to kith and kin, the exorbitant price of a first-class stamp – £1.65! – and the nervous waits at home for online gift deliveries that probably won’t arrive on time are calculated to send anyone’s blood pressure soaring.

And so you could be forgiven for assuming that I would be all in favour of the nation’s privatised postal delivery service being sold to a foreign billionaire.

But the news that the Government has given the green light to a £3.6billion bid for Royal Mail by a ruthless Czech tycoon called Daniel Kretinsky fills me with dread.

It is ludicrous to suggest that lower prices and better services will be the result of handing the command of this great British institution – established during the reign of Henry VIII – to a man so shadowy he is known as ‘the Czech Sphinx’.

Debt

The reverse will be the case because, in order to buy International Distribution Services (IDS) – the publicly listed owner of the Royal Mail – Kretinsky, his backers and a consortium of foreign banks will overload the company with a debt mountain.

And we don’t have to look very far to see how disastrous such loan-fuelled takeovers of public services have proved for British consumers.

Thames Water, which pours sewage into the nation’s most famous river on a daily basis, has been all but destroyed by rapacious foreign investors who loaded it up with £16billion of debt as they simultaneously creamed off tens of millions of pounds in dividends and directors’ fees.

In the same way, overseas ownership of many of the rail franchises is among the reasons why Keir Starmer’s deeply underwhelming Government has decided to take train services back into public ownership as their companies’ contracts expire, with a Bill to create Great British Railways.

I am all the more disappointed because I have long campaigned against the government selling off our public utilities and very best technology companies to foreign owners. And I had hoped that the National Security & Investments Act, which became law in 2021, would finally end the scandal of Britain auctioning its commercial crown jewels to the highest overseas bidder.

The new Act, modelled on the US’s robust Committee on Foreign Investment, offered the promise of a new era in which public services would be prioritised over unsuitable ownership, vital strategic interests preserved and cutting-edge technologies and patents, often the product of our tremendous research universities, saved for the nation.

After all, in America, an effort by Japan’s Nippon Steel to buy Pittsburgh-based US Steel, is currently marooned due to strategic and political concerns about the takeover, even though Tokyo is among Washington’s staunchest allies.

No such luck on this side of the pond. Yesterday, we learned that Labour’s Business Secretary Jonathan Reynolds is allowing the £3.6billion (£5.3billion including existing debt) Czech bid for Royal Mail to go ahead after Kretinsky’s consortium offered a wide range of undertakings.

These include pledges not to make cuts to the highly unionised workforce, to abide by the Universal Service Obligation (primarily next-day, first-class deliveries) and maintain a UK headquarters for five years – the blink of an eye in the Royal Mail’s 500-year history.

I have news for Reynolds. Such deals are not worth the paper they are written on. Over the past several decades we have seen foreign private equity and overseas buyers run roughshod over similar agreements.

In some cases, assets have been sold off to third parties within weeks of deals being completed, with the guts of the enterprise together with all its decision-making functions moved overseas, leaving only ‘brass plate’ headquarters in the country of origin.

The Government is trumpeting that it is retaining a ‘golden share’ which will give it control over any major governance changes. That, too, is a charade. When economic and commercial conditions change, as they do after shocks such as the pandemic, all bets are off and business owners abrogate promises made in the heat of a takeover.

Bad industrial relations are likely to be a problem too. Ever since the privatisation of Royal Mail, conducted by then Lib Dem Business Secretary Vince Cable and the Coalition government in 2012, relations between management and the principal employee group, the Communication Workers Union (CWU), have been fraught.

Postal volumes had plunged following the introduction of email and text messaging but the CWU staunchly resisted job cuts and any form of modernisation, such as mechanical sorting, that might have an impact on workforce numbers.

Paymasters

And it looks like Labour insisted on maintaining that deeply inefficient status quo for the workers in return for giving the deal the go-ahead.

We have seen from almost the first days of Labour’s return to Downing Street how susceptible the Government is to demands from its union paymasters.

One of its first acts was to dish out £9.4billion of above-inflation pay settlements to public sector unions and the railway workers without being given any assurances on productivity improvements. In the course of the acquisition process, Kretinsky has had talks with the CWU and bought their support with promises of no redundancies, no watering down of union rights and regular above inflation pay increases. It is the kind of ‘peace’ deal which Reynolds and Labour couldn’t fail to find attractive.

However, such extravagant promises will come at the cost of future investment. To buy the Royal Mail, the Kretinsky consortium is to take on £3billion of extra debt, largely from overseas banks such as France’s BNP Paribas.

That will lift the company’s overall debt burden to more than £5billion. This means that large amounts of cash paid by ordinary Britons for postage stamps and delivery services will leave the Royal Mail by the back door to feed its voracious creditors instead of being invested in improved services.

Barriers

Highly indebted takeovers of supermarket groups, such as Morrisons and Asda, have seen them struggling ever since because of colossal interest rate bills. This has allowed rivals such as Tesco, Sainsbury’s and the German-owned Lidl and Aldi to advance at their expense.

An infinitely better solution in the case of Royal Mail would surely be for the board of its parent company IDS to deal with its underlying problems by bringing in fresh, more able executives, harness the benefits offered by AI and new technology and tackle the union barriers to reform.

Instead, the government has opted for the easy option of letting it fall into overseas hands.

There can be no greater betrayal of a totemic British company, one that is the custodian of postage stamps bearing the King’s head and of bright red pillar boxes adorned with the royal ciphers, and the employer of indefatigable posties who can be relied upon to pound the streets and trudge up our garden paths whatever the weather.

The deal isn’t actually finalised, despite media reports to the contrary.

EP Group/Kretinsky, still has to pass security clearances and also the EU. The deal is under scrutiny from the EU because of EP Group already owning Netherlands Post (don’t know its correct moniker). So it isn’t over yet.

[Mr Rush]

harness the benefits offered by AI

Oh, f**k off.

[TopperGas]

Alex Brummer, Daily Mail, 17th Dec:

These deals aren’t worth the paper they’re written on
I’ve news for the naive ministers who’ve sold off the Royal Mail to a shadowy foreign predator known as the Czech Sphinx...

Daily Mail17 Dec 2024 by Alex Brummer City Editor

TIS the season to be jolly but the Royal Mail doesn’t half make it difficult to bring a smile to one’s lips at this time of year.

The never-ending queues at Post Offices to send parcels to kith and kin, the exorbitant price of a first-class stamp – £1.65! – and the nervous waits at home for online gift deliveries that probably won’t arrive on time are calculated to send anyone’s blood pressure soaring.

And so you could be forgiven for assuming that I would be all in favour of the nation’s privatised postal delivery service being sold to a foreign billionaire.

But the news that the Government has given the green light to a £3.6billion bid for Royal Mail by a ruthless Czech tycoon called Daniel Kretinsky fills me with dread.

It is ludicrous to suggest that lower prices and better services will be the result of handing the command of this great British institution – established during the reign of Henry VIII – to a man so shadowy he is known as ‘the Czech Sphinx’.

Debt

The reverse will be the case because, in order to buy International Distribution Services (IDS) – the publicly listed owner of the Royal Mail – Kretinsky, his backers and a consortium of foreign banks will overload the company with a debt mountain.

And we don’t have to look very far to see how disastrous such loan-fuelled takeovers of public services have proved for British consumers.

Thames Water, which pours sewage into the nation’s most famous river on a daily basis, has been all but destroyed by rapacious foreign investors who loaded it up with £16billion of debt as they simultaneously creamed off tens of millions of pounds in dividends and directors’ fees.

In the same way, overseas ownership of many of the rail franchises is among the reasons why Keir Starmer’s deeply underwhelming Government has decided to take train services back into public ownership as their companies’ contracts expire, with a Bill to create Great British Railways.

I am all the more disappointed because I have long campaigned against the government selling off our public utilities and very best technology companies to foreign owners. And I had hoped that the National Security & Investments Act, which became law in 2021, would finally end the scandal of Britain auctioning its commercial crown jewels to the highest overseas bidder.

The new Act, modelled on the US’s robust Committee on Foreign Investment, offered the promise of a new era in which public services would be prioritised over unsuitable ownership, vital strategic interests preserved and cutting-edge technologies and patents, often the product of our tremendous research universities, saved for the nation.

After all, in America, an effort by Japan’s Nippon Steel to buy Pittsburgh-based US Steel, is currently marooned due to strategic and political concerns about the takeover, even though Tokyo is among Washington’s staunchest allies.

No such luck on this side of the pond. Yesterday, we learned that Labour’s Business Secretary Jonathan Reynolds is allowing the £3.6billion (£5.3billion including existing debt) Czech bid for Royal Mail to go ahead after Kretinsky’s consortium offered a wide range of undertakings.

These include pledges not to make cuts to the highly unionised workforce, to abide by the Universal Service Obligation (primarily next-day, first-class deliveries) and maintain a UK headquarters for five years – the blink of an eye in the Royal Mail’s 500-year history.

I have news for Reynolds. Such deals are not worth the paper they are written on. Over the past several decades we have seen foreign private equity and overseas buyers run roughshod over similar agreements.

In some cases, assets have been sold off to third parties within weeks of deals being completed, with the guts of the enterprise together with all its decision-making functions moved overseas, leaving only ‘brass plate’ headquarters in the country of origin.

The Government is trumpeting that it is retaining a ‘golden share’ which will give it control over any major governance changes. That, too, is a charade. When economic and commercial conditions change, as they do after shocks such as the pandemic, all bets are off and business owners abrogate promises made in the heat of a takeover.

Bad industrial relations are likely to be a problem too. Ever since the privatisation of Royal Mail, conducted by then Lib Dem Business Secretary Vince Cable and the Coalition government in 2012, relations between management and the principal employee group, the Communication Workers Union (CWU), have been fraught.

Postal volumes had plunged following the introduction of email and text messaging but the CWU staunchly resisted job cuts and any form of modernisation, such as mechanical sorting, that might have an impact on workforce numbers.

Paymasters

And it looks like Labour insisted on maintaining that deeply inefficient status quo for the workers in return for giving the deal the go-ahead.

We have seen from almost the first days of Labour’s return to Downing Street how susceptible the Government is to demands from its union paymasters.

One of its first acts was to dish out £9.4billion of above-inflation pay settlements to public sector unions and the railway workers without being given any assurances on productivity improvements. In the course of the acquisition process, Kretinsky has had talks with the CWU and bought their support with promises of no redundancies, no watering down of union rights and regular above inflation pay increases. It is the kind of ‘peace’ deal which Reynolds and Labour couldn’t fail to find attractive.

However, such extravagant promises will come at the cost of future investment. To buy the Royal Mail, the Kretinsky consortium is to take on £3billion of extra debt, largely from overseas banks such as France’s BNP Paribas.

That will lift the company’s overall debt burden to more than £5billion. This means that large amounts of cash paid by ordinary Britons for postage stamps and delivery services will leave the Royal Mail by the back door to feed its voracious creditors instead of being invested in improved services.

Barriers

Highly indebted takeovers of supermarket groups, such as Morrisons and Asda, have seen them struggling ever since because of colossal interest rate bills. This has allowed rivals such as Tesco, Sainsbury’s and the German-owned Lidl and Aldi to advance at their expense.

An infinitely better solution in the case of Royal Mail would surely be for the board of its parent company IDS to deal with its underlying problems by bringing in fresh, more able executives, harness the benefits offered by AI and new technology and tackle the union barriers to reform.

Instead, the government has opted for the easy option of letting it fall into overseas hands.

There can be no greater betrayal of a totemic British company, one that is the custodian of postage stamps bearing the King’s head and of bright red pillar boxes adorned with the royal ciphers, and the employer of indefatigable posties who can be relied upon to pound the streets and trudge up our garden paths whatever the weather.

The deal isn’t actually finalised, despite media reports to the contrary.

EP Group/Kretinsky, still has to pass security clearances and also the EU. The deal is under scrutiny from the EU because of EP Group already owning Netherlands Post (don’t know its correct moniker). So it isn’t over yet.

As worst the EU will tell EP they have to sell off parts of the business, although I doubt there's much cross over between the UK and Holland operations it's not like when the petrol station company bought Asda and had to sell off some of the petrol stations.

[TopperGas]

That was the plan, yes. But I don’t think it will ever happen. Not least just for purely practical reasons, such as RM’s core network not being equipped for moving or handling XL consignments. PFW will be sold off at the earliest possible opportunity as a loss-making subsidiary to some venture capitalists who will rebrand it as a large and heavy niche provider. “RM Letters” has no choice but to concentrate on next-day/overnight parcels for itself alone if it wants to continue to exist.

The business has always wanted a single optimised parcel network. Obviously, having both RM and Parcelforce cover the same ground adds both cost and inefficiency as an overall business as well as increasing our carbon footprint. Rico Back wanted to create a new legal trading entity for Parcelforce and invoke TUPE and I have a feeling that PWF may be sold off in the long term. We seem to be taking on board many of the larger parcels and PWF appears to be deliberately run very inefficiently.

None of the above comments about Parcelforce make any sense ,
They have been trialing taking royal mail parcels for the last 6 months and the trials are going well ,
also they have recently bought brand new vans , Why would you do that if you are running the company down ready to sell ?
They also have 25% owner drivers that can deliver the parcels cheaper , and last time it was mentioned Parcel force was not losing money it was breaking even , How much money are the inefficient DPR routes losing ? .

You don’t run a company down to sell it. To use a corner shop analogy, the shopkeeper invariably refurbishes and refits his shop prior to putting it on the market and selling it so that he gains the best achievable sale price. RM will be similarly tarting up PFW. All those RM parcels will artificially increase the traffic volumes passing through the PFW ecosystem, and that will translate into the balance sheet and the company’s financials, thus presenting PFW in a rosey light to prospective purchasers. Vans are assets, albeit depreciating ones, and are also an essential tool for last-mile delivery, so you can’t read anything into that.

EP Group have no plans to break up RM. That means that the activity to reintegrate PFW will march on.

Does PFW fall under "RM" or could EP say later they were referring to just "RM" and not other parts of the business?