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{{short description|U.S. consumer staples company (1985–1999)}}
{{Use mdy dates|date=August 2023}}
{{Use American English|date=September 2023}}
{{Infobox company
| name
|
|
| logo_caption = Nabisco logo since 1991
| type
| fate
| predecessors = {{Plainlist|
* [[Nabisco|Nabisco Brands]]
* [[R. J. Reynolds Tobacco Company]]
| location = {{ubl|[[Winston-Salem, North Carolina]]|[[Cobb County, Georgia]]|[[Midtown Manhattan]], [[New York City]]}}▼
* [[Curtiss Candy Company]]
| slogan = ▼
}}
| key_people = ▼
| successor = [[Nabisco]] (now owned by [[Mondelēz International]])
| foundation = {{Start date and age|1985|4|25}}
| defunct = {{End date and age|1999|df=y}}
▲| location
| owner = [[R. J. Reynolds Tobacco Company|R.J. Reynolds]]
| num_employees =
| industry
| products
| revenue
| net_income
| parent
| homepage
}}
'''
== History ==
[[File:Credi- Lyonnais-building.jpg|thumb|[[Calyon Building]], former site of the RJR Nabisco headquarters]]
RJR Nabisco was formed in 1985 by the merger of [[Nabisco
In 1988 RJR Nabisco was purchased by [[Kohlberg Kravis Roberts & Co.]] in what was at the time the largest [[leveraged buyout]] in history.
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]]. Nabisco is currently owned by [[Mondelēz International|
RJR Nabisco Holdings Corp. (NYSE: NGH) was the parent company of RJR Nabisco, Inc.<ref>"[https://web.archive.org/web/19981202014039/http://www.rjrnabisco.com/b_profile/b_profil.htm Corporate Profile]." [[Nabisco Group Holdings]]. October 1, 2000. Retrieved on December 2, 1998.</ref> After the food and tobacco businesses separated in June 1999, Nabisco Group Holdings Corp. owned 80% of RJR Nabisco Holdings Corp., which was the parent company of Nabisco, Inc.<ref>"[https://web.archive.org/web/20001001104651/http://www.rjrnabisco.com/b_profile/b_profil.htm Corporate Profile]." [[Nabisco Group Holdings]]. October 1, 2000. Retrieved on December 2, 2011.</ref>
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=== Headquarters move ===
In August 1986, the RJR Nabisco board announced that [[F. Ross Johnson]] would replace J. Tylee Wilson as head of the company effective January 1, 1987. Soon after
=== The leveraged buyout ===
The RJR Nabisco leveraged buyout was, at the time, widely considered to be the preeminent example of corporate and executive [[greed (emotion)|greed]]. [[Bryan Burrough]] and [[John Helyar]] published ''[[Barbarians at the Gate: The Fall of RJR Nabisco]]'', a successful book about the events which
Ross Johnson was the President and [[CEO]] of RJR Nabisco at the time of the leveraged buyout and [[Henry Kravis]] was the managing partner at [[Kohlberg Kravis Roberts & Co]]. The [[leveraged buyout]] was in the amount of $25 billion, and the battle for control took place between October and November 1988.
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KKR quickly introduced a tender offer to obtain RJR Nabisco for $90 per share—a price that enabled it to proceed without the approval of RJR Nabisco's management. RJR's management team, working with Shearson Lehman Hutton and Salomon Brothers, submitted a bid of $112, a figure they felt certain would enable it to outflank any response by Kravis. KKR's final bid of $109, while a lower dollar figure, was ultimately accepted by the board of directors.
It was accepted because KKR's offer was guaranteed whereas management's lacked a "reset", meaning that the final share price might have been lower than their professed $112 per share. Additionally, many in RJR's board of directors had grown concerned at recent disclosures of Johnson's unprecedented golden parachute deal. ''[[Time
KKR's offer was welcomed by the board, and, to some observers, it appeared that their elevation of the reset issue as a deal-breaker in KKR's favor was little more than an excuse to reject Johnson's higher payout of $112 per share.<ref>{{cite news| url=https://money.cnn.com/magazines/fortune/fortune_archive/1989/04/24/71880/| title=How Ross Johnson Blew the Buyout| author=Bill Saporito| publisher=[[CNN Money]]| date=April 24, 1989| url-status=dead| archive-url=https://web.archive.org/web/20140416205956/http://money.cnn.com/magazines/fortune/fortune_archive/1989/04/24/71880/| archive-date=April 16, 2014}}</ref> Johnson received compensation worth more than $60 million from the buyout, then left in February 1989. In March 1989, [[Louis V. Gerstner]] of [[American Express]] became the new head of RJR Nabisco.<ref name=Bucolic/>
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As a result of the acquisition, RJR Nabisco divested the following divisions:
* Nabisco's UK operations (including [[The Smith's Snackfood Company|Smith's]] and [[Walkers (snack foods)|Walkers]]), Belin of France, and Saiwa of Italy were sold to [[Groupe Danone|BSN]].<ref>{{Cite news | title = 5 RJR Units Sold for $2.5 Billion - NYTimes.com | work = The New York Times | date = 7 June 1989 | access-date = 2015-02-09 | url = https://www.nytimes.com/1989/06/07/business/5-rjr-units-sold-for-2.5-billion.html | last1 = Greenhouse | first1 = Steven }}</ref> Smith's and Walkers were swiftly resold to [[PepsiCo]].<ref>{{Cite news | title = Pepsico, to Aid Europe Sales, Buys 2 British Snack Units - NYTimes.com | work = The New York Times | date = 4 July 1989 | access-date = 2015-02-09 | url = https://www.nytimes.com/1989/07/04/business/pepsico-to-aid-europe-sales-buys-2-british-snack-units.html | last1 = McGill | first1 = Douglas C. }}</ref>
* [[Chun King]] was sold to [[Yeo Hiap Seng]].<ref>[http://articles.chicagotribune.com/1989-06-22/business/8902110543_1_chun-king-rjr-nabisco-chow-mein "RJR Sending Chun King To Orient"]. [[Chicago Tribune]], June 22, 1989.</ref>
* Associated Biscuits International (consisting of 38% of India's Britannia and 40% of Pakistan's [[Peek Freans|English Biscuit Manufacturers]]) was sold to [[Britannia Industries]].<ref>{{Cite news |
* [[Fresh Del Monte Produce]] was sold to [[Polly Peck]].<ref>{{Cite news | issn = 0458-3035 | agency = Associated Press | title = British Conglomerate to Buy Part of Del Monte From RJR | work = Los Angeles Times | access-date = 2015-02-09 | date = 1989-09-08 | url = https://articles.latimes.com/1989-09-08/business/fi-1943_1_del-monte }}</ref>
* [[Del Monte Foods]] was sold to [[Merrill Lynch]], [[Court Square Capital Partners|Citicorp Venture Capital]], and [[Kikkoman]]. Del Monte's Asia operations (outside the Philippines) were separately sold to Kikkoman.<ref>{{Cite news | issn = 0458-3035 | last = La Ganga | first = Maria L. | title = RJR Sells Del Monte Operations for $1.4 Billion : Deal Puts Company Close to Lenders' February, 1990, Debt-Reduction Goal | work = Los Angeles Times | access-date = 2015-02-09 | date = 1989-09-26 | url = https://articles.latimes.com/1989-09-26/business/fi-270_1_del-monte }}</ref>
* The company's 20% stake in [[ESPN Inc.]] was sold to [[Hearst Communications]].<ref>{{Cite news|last=Fabrikant|first=Geraldine|date=1990-11-09|title=Hearst to Buy 20% ESPN Stake From RJR|language=en-US|work=The New York Times|url=https://www.nytimes.com/1990/11/09/business/hearst-to-buy-20-espn-stake-from-rjr.html|access-date=2021-10-22|issn=0362-4331}}</ref><ref>{{Cite web|last=Staff|title=HEARST BUYS 20% OF ESPN|url=https://buffalonews.com/news/hearst-buys-20-of-espn/article_8863254d-4fa5-5029-b120-16ef6ff13cad.html|access-date=2021-10-22|website=The Buffalo News|date=November 9, 1990 |language=en}}</ref>
Another major consequence of the buyout was that according to [[United States Department of Labor]], in its report "American Workplace", over 2,000 workers subsequently lost their jobs, which 72% eventually replaced, but earning less than half of their previous incomes, suggesting that it took most of those who lost their jobs an average of 5.6 months to find new employment.<ref>{{Cite book|title=U.S. Department of Labor, Office of the American Workplace, Volumes 2-3, Issues 1-5|publisher=United States Department of Labor|year=1994}}</ref>
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== Further reading ==
* {{cite book | author1=Burrough, Bryan | author2=Helyar, John | title=Barbarians at the Gate: The Fall of RJR Nabisco | publisher=[[Harper & Row]] | location=New York | year=1990 | isbn=0-06-016172-8 | url-access=registration | url=https://archive.org/details/barbariansatgat000burr }}
== External links ==
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{{DEFAULTSORT:Rjr Nabisco}}
[[Category:R. J. Reynolds Tobacco Company]]
[[Category:Defunct food and drink companies of the United States]]
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