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RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Industries. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co. in the largest leveraged buyout (LBO) in history, adjusted for inflation.
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 Corp..
The RJR Nabisco LBO 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 LBO
F. Ross Johnson was the President and CEO of RJR Nabisco at the time of the LBO and Henry Kravis was a general partner at KKR. The LBO was $25 billion, the battle for control took place between October and 1988. Nowadays, public await the next LBO to be announced.
An article in Forbes at the time sheds some light on LBOs, 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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