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- In what was the biggest merger of its time, RJR Nabisco became privately owned in 1989 when it was merged into investment firm Kohlberg Kravis Roberts & Co. Nabisco and Reynolds became independent with the 1999 spin-off of R.J. Reynolds shares.
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Dec 31, 2016 · NEW YORK (AP) — F. Ross Johnson, the former RJR Nabisco CEO depicted as the epitome of corporate greed in the best-selling book and movie “Barbarians at the Gate,” has died. He was 85. The Aycock-Riverside Funeral and Cremation Center in Jupiter, Florida, said Johnson died Thursday.
- The Doldrums
- A Record-Breaking Merger
- Meeting with Raiders
- In Play
- Battling For Oreos and Camels
- Nabisco Lives on
- The Fallout
- The Bottom Line
In the 1980s, tobacco giant R.J. Reynolds was in despair about its future. It was a one-product company, and the product was cigarettes. Public attention to the health risks associated with tobacco use was increasing. Litigation was getting costly and smokers were quitting. CEO J. Tylee Wilson decided to search for another business to merge with—id...
In the spring of 1985, Wilson and Johnson met to discuss a friendly merger in which Wilson would become chair of the new company. Johnson disliked the vice-chair title he was offered and asked for the post of president and chief operating officer. Wilson countered by suggesting Johnson could have the top post when Wilson retired two years later. In...
In 1988, Johnson met informally with Kohlberg Kravis & Roberts, better known as KKR. Henry Kravis of KKR talked about the benefits of LBOs, including the tightening of management and improved efficiency. That wasn't necessarily what Johnson wanted. However, after talking with KKR, Johnson was convinced by some of the benefits of an LBO, namely an a...
Johnson was in fact working with Shearson Lehman Hutton to bring a completed LBO to the meeting to avoid bringing the company into play, where it could be auctioned to the highest bidder. Johnson's terms for the LBO were control of the board and 20% of the stock for himself and seven managers—stock that was projected to be worth billions in five ye...
KKR swooped in and offered the board $90 a share, touching off a bidding war. KKR wanted the company, but they didn't want Johnson anymore. Johnson's team upped its bid to $92. The board decided that the company would sell itself to the highest bidder. KKR raised its bid to $94, including $75 in cash and $19 in other securities, including Drexel ju...
For years after the deal, RJR Nabisco continued to get juggled about. KKR cut jobs and divisions, spinning the international tobacco business off to Japan Tobacco. The domestic parts, both tobacco and food, were separated and recombined in a shuffle involving almost as many players as the original dance—even Carl Icahnwas in there. In June 2000, Ph...
The RJR Nabisco story started a debate over the ethics of Wall Street and the outsized greed of some of its participants. In particular, the leveraged buyout were examined. The LBO was an opportunity to create a huge profit for a few by sucking a massive amount of value out of a company, leaving an outsized debt behind. Leveraged buyouts still occu...
Corporate kleptocracyrefers to the use of underhanded tactics by corporate executives to siphon off wealth at the expense of shareholders. The scandal at RJR Nabisco is a good example of corporate kleptocracy in the 1980s. When F. Ross Johnson became CEO of Nabisco Brands in 1986, he increased management's compensation and perks, used the company's...
And in June, RJR officially separated from Nabisco, cutting the final tie to a business strategy begun more than 30 years ago, when the company began plowing its profits into businesses other than ...
F. Ross Johnson, the former top executive of RJR Nabisco and perhaps the most vilified businessman in local history, died Thursday of pneumonia at age 85. Johnson’s death was confirmed by a...
F.Ross Johnson was officially chief executive of RJR Nabisco for only 15 days when he stuck a dagger in the heart of proud Winston-Salem. Less than two years later, he showed what he could really ...
Apr 3, 2024 · In what was the biggest merger of its time, RJR Nabisco became privately owned in 1989 when it was merged into investment firm Kohlberg Kravis Roberts & Co. Nabisco and Reynolds became independent with the 1999 spin-off of R.J. Reynolds shares. See Nabisco; R.J. Reynolds Tobacco.
Jan 1, 2001 · Bryan Burrough, John Helyar. A #1 New York Times bestseller and arguably the best business narrative ever written, Barbarians at the Gate is the classic account of the fall of RJR Nabisco. An enduring masterpiece of investigative journalism by Bryan Burrough and John Helyar, it includes a new afterword by the authors that brings this remarkable ...
