RJR Nabisco

RJR Nabisco was a large American conglomerate formed in 1985 by the merger of R.J. Reynolds Tobacco Company and Nabisco. The company was led by F. Ross Johnson, who played a key role in the leveraged buyout of the company by Kohlberg Kravis Roberts in 1988, with the help of Henry Kravis and George Roberts. This deal was one of the largest leveraged buyouts in history, involving Drexel Burnham Lambert, Morgan Stanley, and Shearson Lehman Hutton. The company's history is closely tied to that of its predecessors, including R.J. Reynolds Tobacco Company, founded by R.J. Reynolds in 1875, and Nabisco, founded in 1898 by Adolphus Green.

● History

The history of RJR Nabisco began with the formation of R.J. Reynolds Tobacco Company in 1875 by R.J. Reynolds in Winston-Salem, North Carolina. The company quickly grew to become one of the largest tobacco companies in the United States, with popular brands like Camel and Winston. Meanwhile, Nabisco was founded in 1898 by Adolphus Green and quickly became a leading manufacturer of baked goods, including Oreos and Ritz crackers. The two companies merged in 1985 to form RJR Nabisco, with F. Ross Johnson as its CEO, who had previously worked at Standard Brands and Nabisco. The company's early years were marked by significant mergers and acquisitions, including the purchase of Del Monte Foods and Fleischmann's Yeast.

● Products

RJR Nabisco's product portfolio included a wide range of tobacco and food products, such as Camel and Winston cigarettes, Oreos and Ritz crackers, and Planters nuts. The company also owned several other popular brands, including Dentyne gum, Toblerone chocolate, and Life Savers candy. RJR Nabisco's products were sold in numerous countries around the world, including the United States, Canada, Mexico, and Europe, through partnerships with companies like Procter & Gamble and Unilever. The company's research and development efforts were focused on creating new products and improving existing ones, with the help of institutes like the Harvard Business School and the Massachusetts Institute of Technology.

● Corporate Affairs

RJR Nabisco's corporate affairs were managed by a team of experienced executives, including F. Ross Johnson, who served as the company's CEO from 1985 to 1989, and Louis Gerstner, who later became CEO of IBM. The company's board of directors included prominent business leaders like Henry Kravis and George Roberts, who played a key role in the company's leveraged buyout in 1988. RJR Nabisco was also involved in various philanthropic efforts, including the RJR Nabisco Foundation, which supported educational and cultural initiatives, such as the Metropolitan Museum of Art and the New York City Ballet.

● Financial Performance

RJR Nabisco's financial performance was strong in the late 1980s, with revenues exceeding $20 billion in 1988, thanks in part to the company's diversified portfolio of tobacco and food products, as well as its significant market share in the United States and Europe. However, the company's financial performance declined in the early 1990s, due to increased competition and regulatory pressures, including the Master Settlement Agreement with state attorneys general, such as New York Attorney General Eliot Spitzer. The company's stock price also declined significantly during this period, leading to a decline in the company's market value, which was covered by financial news outlets like Bloomberg and The Wall Street Journal.

● Notable Events

One of the most notable events in RJR Nabisco's history was its leveraged buyout by Kohlberg Kravis Roberts in 1988, which was one of the largest leveraged buyouts in history, involving Drexel Burnham Lambert and Morgan Stanley. The deal was led by Henry Kravis and George Roberts, and was supported by banks like Bank of America and J.P. Morgan & Co.. The company was also involved in several high-profile lawsuits, including a tobacco litigation case in Florida, which was covered by news outlets like CNN and The New York Times. Additionally, RJR Nabisco was a major sponsor of the 1988 Summer Olympics in Seoul, South Korea, and the 1992 Winter Olympics in Albertville, France, through partnerships with International Olympic Committee and NBC.

● Legacy

RJR Nabisco's legacy is complex and multifaceted, reflecting both the company's significant contributions to the tobacco and food industries, as well as its involvement in various controversies and scandals, including the tobacco industry's health risks and environmental impact. The company's brand portfolio continues to be owned and operated by various companies, including Reynolds American and Nabisco Inc., which are now part of British American Tobacco and Mondelez International, respectively. RJR Nabisco's story has also been the subject of several books and films, including Barbarians at the Gate, which was written by Bryan Burrough and John Helyar, and later adapted into a HBO movie starring James Garner and Jonathan Pryce. The company's history is also studied by business schools like the Wharton School and the Stanford Graduate School of Business.