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RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co. in the largest leveraged buyout in history, adjusted for inflation.[citation needed]
In 1999, due to concerns about tobacco lawsuit liabilities, the tobacco business was spun off into a separate company, and RJR Nabisco was renamed Nabisco Holdings Corporation.
The RJR Nabisco leveraged buyout was, at the time, widely considered to be the pre-emininent example of corporate and executive greed. Bryan Burrough and John Helyar published Barbarians at the Gate: The Fall of RJR Nabisco, a successful book about the events which was later turned into a television movie for HBO.
The leveraged buyout
F. Ross Johnson was the President and CEO of RJR Nabisco at the time of the leveraged buyout and Henry Kravis was a general partner at Kohlberg Kravis Roberts & Co. The leveraged buyout was $25 billion, the battle for control took place between October and November 1988.
An article in Forbes at the time sheds some light on leveraged buyouts, particularly this one and is available online: http://www.forbes.com/free_forbes/1988/1128/192.html
The European Union Lawsuit
More than a decade after Kohlberg Kravis Roberts & Co. took over RJR Nabisco, the European Union filed a lawsuit in US Federal District Court against RJR Nabisco alleging global money laundering by the corporation for various mafia and organized crime groups. For a description of the lawsuit, see Dillon, Read & Co. Inc. and the Aristocracy of Prison Profits, Chapter 3 [1], and copies of selected lawsuit filings listed under RJR Nabisco at the Article Resources - Organizations[2].
References
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