Barbarians at the Gate: The Fall of RJR Nabisco

Nabisco

The writer F. Scott Fitzgerald once wrote in a notebook, “Show me a hero and I’ll write you a tragedy.” The story of the fall of RJR Nabisco would certainly be applicable.

The tragic hero is Frederick Ross Johnson, a ‘self-made’ man who hustled as an entrepreneur from his earliest days in Canada to rise up the ranks and become the CEO of RJR Nabisco.

RJR Nabisco was a tobacco company that combined two giants; the Nabisco Company, founded in 1898, and the R.J. Reynolds Tobacco Company, founded in 1875. The companies merged in 1986, and journalists Bryan Burrough and John Heylar documented the story of the fall of the RJR Nabisco Company in a book in 1989. The name of the book is ‘Barbarians at the Gate: The Fall of RJR Nabisco.’

This story is based upon the real-life events and the growth of the ability to finance transactions through the process of a leveraged buyout (LBO). A leveraged buyout is a transaction where a company uses external finance to buy a majority share in its company.

Within the story Johnson attempts to execute an LBO of RJR Nabisco with the help of a company called Kohlberg Kravis Roberts & Co. (KKR & Co.) founded by Jerome Kohlberg and the first cousins Henry Kravis and George Roberts. Unfortunately things do not quite go to plan for Johnson.

The movie of the book is a wonderful piece of dramatic comedy with a tragic ending, for some, but not for others.

“Everything’s got a moral, if only you can find it.” – Lewis Carroll

 

Barbarians at the gate movie

Writer: Bryan Burrough

Writer: John Heylar

Director: Glenn Jordan

Screenplay: Larry Gelbart

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