Reckitt Benckiser to swallow up Mead Johnson, Greene King serves up a strong Christmas

London open

The FTSE 100 is expected to open 22 points higher on Friday, after closing up 0.57% at 7,229.50 on Thursday.

Stocks to watch

Nurofen and Durex maker Reckitt Benckiser confirmed that it will buy US baby milk company Mead Johnson for up to $17.9bn, while it also said that revenue and earnings grew in 2016 despite challenging markets and products. The FTSE 100 company is to buy Mead Johnson for $90 per share in cash, valuing Mead Johnson's equity at $16.6bn with the total value of the deal coming to $17.9bn including net debt.

Pub group Greene King reported strong trading over the Christmas period on Friday as it sounded an upbeat note on its outlook. In the 40 weeks to 4 February, like-for-like sales grew 1.1%. Excluding Fayre & Square, LFL sales were up 1.6% over the period. Over the last 16 weeks, the company said it had seen strong Christmas trading, alongside the usual quieter months of November and January.

Online food ordering and delivery service Just Eat announced on Friday that, due to urgent family matters, David Buttress had informed the board of his intention to step down from his role as chief executive officer. The FTSE 250 company said Buttress would continue to work full time in the company until the end of the first quarter, at which time John Hughes - who has been chairman of the board for almost six years - will assume the role of executive chairman. It confirmed it was commencing an immediate search to find a replacement for Buttress, who also agreed to serve a minimum one-year term as a non-executive director.

Newspaper round-up

The Greek government has expressed hope of an imminent deal with its EU creditors, despite a warning from the German finance minister, Wolfgang Schäuble, that the country could cut its debts only by leaving the single currency. Athens is in a familiar stand-off with the German finance ministry as it seeks easier repayment terms on its €330bn (£280bn) debt pile, which the International Monetary Fund has described as unsustainable and explosive. - Guardian

The former Labour leader Ed Miliband is leading a campaign for the media regulator Ofcom to launch a full inquiry into Rupert Murdoch’s bid for ownership of the satellite broadcaster Sky. In a letter to Sharon White, the chief executive of Ofcom, Miliband is one of several senior cross-party politicians to demand that the regulator carry out a “fit and proper person” test following 21st Century Fox’s bid for the 61% of Sky it does not already own. - Guardian

Two of the biggest global banks have told French politicians in brutally clear language that Paris has almost no chance of capturing serious business from the City of London without radical reform of the country’s labour code. A special Brexit panel in the French Senate revealed just how difficult it will be for Paris to become Europe’s pre-eminent financial centre once Britain leaves the EU. Any migration of business is more likely to go to Dublin, Frankfurt, or even to New York. – Telegraph

The Insolvency Service has engaged forensic accountants and senior lawyers as it investigates whether former BHS directors should be disqualified. The government last year ordered the service to launch a fast-track investigation into the collapse of BHS, rather than awaiting initial findings from the administrator. – The Times

With most of the world focused on US polling booths on November 8, Royal Bank of Scotland took the opportunity to release the news that it intended to compensate victims of its global restructuring group. For years RBS had denied that GRG had been at the centre of a systematic attempt by the bank to destroy small business customers under the supervision of its turnaround team. – The Times

US close

US stocks were led higher on Thursday as consumer and finance stocks were bucked up President Donald Trump's pledge to unveil something "phenomenal" on tax plan in the coming weeks.

The Dow Jones Industrial Average closed up 0.59% at 20,172.40, while the S&P 500 and Nasdaq Composite both gained 0.58% to finish at 2,307.87 and 5,715.18.

A plunge in weekly jobless claims to their lowest levels since November, 234k, and a rally in oil prices provided further lubrication for the markets.

Following heavy losses for crude in the previous session, West Texas Intermediate bounced back 1.3% to $53.03 per barrel and Brent crude was almost 1% firmer at $55.65.

The dollar, meanwhile, topped 113 against the yen Trump’s meeting with Japanese Prime Minister Shinzo Abe on Friday.

Against the pound and the euro the greenback was 0.35% higher at $1.2497 and $1.0659.

Analyst Naeem Aslam at Think Markets said EURUSD had the potential to revisit 1.0451.

"Trump who had a dovish stance is no longer sure if weaker or stronger dollar is good for the economy and we are anticipating that he may be changing his view. Any strength in the dollar is going to push the euro lower."