Hats off to the Unilever Board for rejecting out of hand the recent takeover approach from Kraft-Heinz. Aside from the socio-political obstacles, there are compelling financial and business reasons why Unilever is better off on its own, and it is encouraging to see the board taking such a strong stance on this.

The Kraft Heinz's private equity backer 3G Capital no doubt saw the potential to increase Unilever’s profitability significantly, as they have done at Kraft-Heinz and Anheuser-Busch before that. The 3G model is one of radical cost cutting. Combining strong brands that are protected by pricing power with a ruthless focus on removing layers of management can result in huge increases in profitability. Slap on a healthy dose of financial leverage and the returns to equity holders can be enormous.