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One thing to start: UK Labour party leader Jeremy Corbyn singles out Morgan Stanley as he lashes out at bankers as “speculators and gamblers who crushed” the country’s economy. The FT story is here and Corbyn video/tweet here.

Back to our normal programming . . . 

What do Sir Kensington’s condiments, Tazo tea, Dollar Shave Club and Seventh Generation cleaning products have in common? They are but four of the 18 companies that consumer goods giant Unilever has gobbled up in bolt-on deals since the start of 2015. 

The latest came this week as Unilever acquired Sundial Brands, a US skincare company whose core customers are mainly African-Americans.

In total, Unilever has shelled out €8.8bn even as it has eschewed the sort of mega-dealmaking that has defined the past few years across the corporate sector.

DD readers already know that the Paul Polman-led (pictured above) company vehemently rejected the overtures of US food group Kraft Heinz, which is backed by 3G Capital and Warren Buffett’s Berkshire Hathaway, earlier this year.

As the FT’s Scheherazade Daneshkhu explains, the steady Unilever acquisition spree is part of a strategy to offset a slowdown in organic sales growth by targeting companies that boast on-trend products, ecommerce savviness and exposure to local markets in which it hopes to expand.

But will all this focus on small brands ultimately move the needle? Consider that the 18 companies that Unilever has bought have combined sales of €2.3bn, according to analysts’ estimates. That is small compared with Unilever’s annual revenues last year of €52.7bn.

One thing is for sure: The dealmaking is on trend with what activist investor Nelson Peltz wants from Procter & Gamble. Among the things Peltz’s Trian has called on P&G to do is for the US company to find new, smaller brands to market to a younger audience, whether through its own research and development or through acquisitions.

Check out this video by the FT’s Anna Nicolaou to learn more about the pressure on the world’s biggest consumer companies to keep pace with newer brands. 

Intelligent curation and exclusive information: This is Due Diligence, the FT’s daily briefing on corporate finance, private equity and M&A. DD is delivered to your inbox Tuesday-Friday at 5am UK time. Meet the team, catch up on previous editions and sign up here. Get in touch with us: Due.Diligence@FT.com 

LSE: The circular battle

As we outlined in on Thursday’s DD, the battle between activist investor Sir Christopher Hohn and the board of the London Stock Exchange Group over the future of chief executive Xavier Rolet came to a lamentable but predictable end after a nasty fight. 

But even though Rolet agreed to step down with immediate effect, Hohn said in a letter on Thursday that he would continue to pursue the ouster of LSE chairman Donald Brydon (pictured).

As such, the LSE confirmed that it would hold an extraordinary shareholder meeting on December 19 and published a circular setting out its defence for Brydon to hang on to his role. 

You can read the full document here, which explains why canning the chairman isn’t a great idea when you’ve just parted ways with your CEO and need to find a new one.

In defending Brydon, the LSE also needed to outline some of the reasons for why it sought Rolet’s departure in the first place. And it did so, having earlier threatened to disclose in detail its rationale, in a way that honoured one of the most British of qualities . . . understatement. 

Here is the choice paragraph from the circular:

“Aspects of Xavier Rolet’s operating style were also important factors taken into account by the Board when assessing the right time to put in place a succession plan. In all the circumstances, including given that Xavier Rolet is leaving the Company and that the second resolution has been withdrawn, the Board has determined that it would be detrimental to the Company and its stakeholders to provide further detail on these aspects.”

The AT&T vs DoJ debate (part 2)

Matthew Klein and Alexandra Scaggs, our colleagues on FT Alphaville, had a vibrant debate over the legitimacy of the Department of Justice’s lawsuit to block AT&T’s $108bn acquisition of Time Warner, which owns HBOCNN and a number of other media assets. 

On Thursday we showcased Matthew’s position, which effectively ridicules the DoJ’s motivations for trying to kill the deal (if you missed it read it here). We are now presenting Alexandra’s counter view, which praises the competition watchdog’s effort to revive regulation of vertical mergers. 

Monopoly profits aren’t necessary for anti-competitive behaviour

I’ll concede this: AT&T’s DirecTV business is probably not a “golden goose”, as the Justice Department claims.

Is it trying to buy earnings growth? Probably. Is it trying to steamroller its nascent online-streaming competition? Maybe! It could be hoping for both, for all we know.

But the question of pay-TV’s profitability isn’t central to the issue at hand. AT&T doesn’t need high pay-TV margins to undermine its competition. In fact, the assumption that antitrust enforcement requires rich monopoly profits and high consumer prices has been challenged in recent years.

The DOJ argues that if AT&T owns a prominent industry supplier, it could simply starve DirecTV’s competitors of content, and lure away their customers by promising a cheaper, faster Game of Thrones fix. (It doesn’t seem terribly easy to compete with HBO.)

Read the entire column here.

Job moves

  • Henry Kravis and George Roberts, co-founders and co-CEOs of KKR, announced a newly promoted group of 23 members and 44 managing directors at the New York private equity group. Read the full list of names here.

  • Aradhana Sarin has joined Alexion Pharmaceuticals as senior vice-president after more than 16 years as an investment banker. Sarin will leave Citigroup where she was a managing director on the healthcare investment banking team. 

Smart reads

Cobalt wars The wars of the future could be fought for control of cobalt, not oil. In the meantime, companies such as Tesla could face huge problems if they aren’t able to gain control over more of the element. (WSJ)

Russian capital leakage How one banker’s arrest shed light on a $10bn money laundering scheme in Russia, and on the country’s growing trouble with keeping its wealth within its borders. (BBG)

South Africa’s Zuptas Jacob Zuma, the Guptas and the selling of South Africa. How did one Indian family manage to gain such extraordinary influence over a country and its politics? (FT)

News round-up

CVS Health closes in on deal to buy Aetna (WSJ)

Axalta and Nippon Paint abandon deal talks (FastFT)

Carlyle flagship buyout fund to be biggest for North America (BBG)

Alibaba’s $7bn funding seen providing firepower for acquisitions (FT)

Nokia denies plan to buy Juniper Networks (Axios)

Nokia/Juniper: re-routing (FT Lex)

Barclay brothers plot £600m bid for London-based WeWork rival (Sky News)

UBS chief blasts regulators’ drive to curb banker pay (FT)

Follow the FT’s deals team

Arash Massoudi in London — @ArashMassoudi

Javier Espinoza in London — @JavierespFT

James Fontanella-Khan in New York — @JFK_America

Sujeet Indap in New York — @sindap

Don Weinland in Hong Kong — @donweinland

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