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{{short description|U.S. consumer staples company (1985–1999)}}
{{
{{Use American English|date=September 2023}}
{{Infobox company
| name = R. J. Reynolds Nabisco, Inc.
| trade_name = RJR Nabisco
| logo = Nabisco logo.svg
| logo_caption = Nabisco logo since 1991
| type = [[Subsidiary]]
| fate = Separated [[R. J. Reynolds Tobacco Company]] and renamed to [[Nabisco Group Holdings]]
| predecessors = {{Plainlist|
* [[Nabisco|Nabisco Brands]]
* [[R. J. Reynolds Tobacco Company]]
* [[Curtiss Candy Company]]
}}
| successor = [[Nabisco]] (now owned by [[Mondelēz International]])
| foundation = {{Start date and age|1985|4|25}}
| defunct = {{End date and age|1999|df=y}}
| location = {{ubl|[[Winston-Salem, North Carolina]]|[[Cobb County, Georgia]]|[[Midtown Manhattan]], [[New York City]]}}
| slogan =
| key_people =
| owner = [[R. J. Reynolds Tobacco Company|R.J. Reynolds]]
| num_employees =
| industry = {{ubl|[[Food processing]]|[[tobacco industry|tobacco]]}}
| products = [[Cookie]]s, [[Cracker (food)|crackers]], [[cigarette]]s
| revenue =
| net_income =
| parent =
| homepage = {{URL|https://web.archive.org/web/*/http://www.rjrnabisco.com|www.rjrnabisco.com}} (archived)
}}
'''
== History ==
[[File:Credi- Lyonnais-building.jpg|thumb|[[Calyon Building]], former site of the RJR Nabisco headquarters]]
▲'''RJR Nabisco, Inc.''', was an [[United States|American]] [[Conglomerate (company)|conglomerate]] headquartered in the [[Calyon Building]]<!--1301 Avenue of the Americas--> in [[Midtown Manhattan]], [[New York City]].<ref>"[http://web.archive.org/web/19990202223718/http://www.rjrnabisco.com/annual97/info.htm Investor Information 1997 Annual Report]." RJR Nabisco. February 2, 1999. Retrieved on December 2, 1999. "Corporate Offices: RJR Nabisco, Inc. 1301 Avenue of the Americas New York, NY 10019"</ref>
In 1988 RJR Nabisco was purchased In 1999, due to concerns about [[tobacco
RJR Nabisco Holdings Corp. (NYSE: NGH) was the parent company of RJR Nabisco, Inc.<ref>"[
The RJR Nabisco leveraged buyout was, at the time, widely considered to be the pre-emininent 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 was later turned into a [[Barbarians at the Gate (film)|television movie]] for [[HBO]].▼
=== Formation ===
▲RJR Nabisco Holdings Corp. (NYSE: NGH) was the parent company of RJR Nabisco, Inc.<ref>"[http://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>"[http://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>
[[R. J. Reynolds Tobacco Company]] was founded in [[Winston-Salem, North Carolina]], in 1875 and changed its name to R. J. Reynolds Industries, Inc. in 1970.
==The leveraged buyout==▼
It became RJR Nabisco on April 25, 1986, after the company's $4.9 billion purchase, and earlier 1.9 billion [[stock swap]], of Nabisco Brands Inc. in 1985.<ref name=NYTimes/><ref name=Sequence>{{cite web|url=http://files.shareholder.com/downloads/RAI/774487414x5356905x279278/335b63c9-8094-4559-a378-0dd439f13e98/securities.pdf|title=A Stock History – Sequence of Events|access-date=2012-03-23}}</ref>
[[F. 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.▼
=== 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, Johnson, believing "bucolic" Winston-Salem did not have the right image for a "world-class company", began seeking other possible headquarters cities. After ruling out [[New York City]] and [[Dallas]], the company decided on [[Atlanta]] because it was "nouveau riche and overbuilt".<ref name=Bucolic>{{cite news|url=http://extras.journalnow.com/lostempire/tob27a.htm|title=Chapter 27: Honk If You're Bucolic|last1=Tursi|first1=Frank|last2=White|first2=Susan E.|last3=McQuilkin|first3=Steve|work=[[Winston-Salem Journal]]|date=1999|access-date=2012-03-20|url-status=dead|archive-url=https://web.archive.org/web/20110307225619/http://extras.journalnow.com/lostempire/tob27a.htm|archive-date=2011-03-07}}</ref> On January 15, 1987, the RJR Nabisco board approved a headquarters move from Winston-Salem to [[Cobb County, Georgia]], north of Atlanta, where the company had rented space. The move would affect 250 to 300 employees, while Winston-Salem would still have 14,000 people working for the company. RJR Nabisco donated the 519,000-square-foot World Headquarters Building to [[Wake Forest University]] but continued to use it until the September 1987 move.<ref name=NYTimes>{{cite news|url=https://www.nytimes.com/1987/01/16/business/company-news-rjr-nabisco-plans-to-move.html|title=RJR Nabisco Plans to Move|work=[[The New York Times]]|date=1987-01-16|access-date=2012-03-20}}</ref> Later, RJR Nabisco's [[Planters]]-[[Life Savers]] Division moved to the former headquarters building.<ref name=Bucolic/>
▲=== The leveraged buyout ===
▲The RJR Nabisco leveraged buyout was, at the time, widely considered to be the
▲
Although KKR eventually took control of RJR Nabisco, RJR management and [[Shearson Lehman Hutton]] had originally announced that they would take RJR Nabisco private at $75 per share. A fierce series of negotiations and proposals ensued which involved nearly all of the major private equity players of the day, including [[Morgan Stanley]], [[Goldman Sachs]], [[Salomon Brothers]], [[First Boston]], [[Wasserstein Perella & Co.]], [[Forstmann Little]], [[Shearson Lehman Hutton]], and [[Merrill Lynch]]. Once put in play by [[Shearson Lehman Hutton]] and RJR management, almost every major Wall Street firm involved in M&A launched frenzied, literal last-minute bids in a fog of incomplete or misleading information.
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
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/>
▲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 Ross Johnson's unprecedented golden parachute deal. ''Time Magazine'' featured Ross Johnson on the cover of its December 1988 issue along with the headline "A Game of Greed: This man could pocket $100 million from the largest corporate takeover in history. Has the buyout craze gone too far?".<ref>{{cite journal| url=http://www.time.com/time/magazine/0,9263,7601881205,00.html| title=A Game of Greed | author=| work=Time Magazine| date=December 5, 1988 }}</ref>
=== After the KKR buyout ===
On April 27, 1989, RJR Nabisco announced it would move its headquarters to the [[New York City]] area.<ref>{{cite news|url=https://articles.latimes.com/1989-04-28/business/fi-1608_1_rjr-nabisco-headquarters-nabisco-brands-gerstner|title=RJR Nabisco Headquarters to Move to New York Area|work=[[Los Angeles Times]]|date=1989-04-28|access-date=2012-03-20}}</ref>
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 |author=<!--Staff writer(s); no by-line.--> |date=July 7, 1989 |title=P.M. BRIEFING : Nabisco Sells India, Pakistan Units |url=https://www.latimes.com/archives/la-xpm-1989-07-07-fi-3554-story.html |work=Los Angeles Times |issn=0458-3035 |access-date=September 2, 2023}}</ref>
* [[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>
On March 21, 1991, RJR Nabisco Holdings Corp. became a publicly traded stock. In March 1999, RJR Nabisco announced the sale of the international division of R. J. Reynolds Tobacco, and in June of that year, the company sold the remainder of R. J. Reynolds Tobacco to stockholders. The parent company became Nabisco Group Holdings and owned 80.5 percent of Nabisco Holdings. In 2000, [[Philip Morris USA|Philip Morris]] bought Nabisco Holdings. Soon after that, R. J. Reynolds Tobacco Holdings, Inc., first traded in June 1999, announced the acquisition of Nabisco Group Holdings. The deal was completed in December 2000.<ref name=Sequence/><ref>Eleni Chamis, "Breakup Dismantles the 1985 Union of Two 100-Year-Old Companies," ''Winston-Salem Journal'', May 13, 1999.</ref>
== Controversy ==
On April 1988, RJR Nabisco fired the [[Saatchi & Saatchi]] advertising agency for their commercial for [[Northwest Airlines]] with the pitch that they no longer allow smoking in any of their flights. Saatchi and Saatchi was handling advertising for Nabisco products and not for any RJR tobacco products.<ref>{{cite news| url=http://www.nytimes.com/1988/04/06/business/cigarette-maker-cuts-off-agency-that-made-smoking-ban-tv-ads.html | work=The New York Times | first=Philip H. | last=Dougherty | title=Cigarette Maker Cuts Off Agency That Made Smoking-Ban TV Ads | date=April 6, 1988}}</ref>▼
=== Ads on smoking-free flights ===
==References==▼
▲
=== Pandora Papers ===
In 2021, RJR Nabisco (before it split up) was [[List of people named in the Pandora Papers|listed]] in the [[Pandora Papers]] after the law firm [[Baker McKenzie]] set up shell companies in Cyprus.<ref>{{Cite web |title=How America's biggest law firm drives global wealth into tax havens - ICIJ |date=4 October 2021 |url=https://www.icij.org/investigations/pandora-papers/baker-mckenzie-global-law-firm-offshore-tax-dodging/ |access-date=2021-10-05 |language=en-US}}</ref>
▲== References ==
{{reflist}}
== Further reading ==
* {{cite book |
== External links ==
{{
* [
{{Authority control}}
{{DEFAULTSORT:Rjr Nabisco}}
▲[[Category:Kohlberg Kravis Roberts companies]]
[[Category:R. J. Reynolds Tobacco Company]]
[[Category:Defunct food and drink companies of the United States]]
[[Category:Tobacco companies of the United States]]
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