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Encyclopedia > Barbarians at the Gate: The Fall of RJR Nabisco

Barbarians at the Gate: The Fall of RJR Nabisco (ISBN 0060161728) is a book by Bryan Burrough and John Helyar, about the leveraged buyout (LBO) of RJR Nabisco. It is based upon a series of articles written by the authors for The Wall Street Journal. In this sense, it resembles Woodward & Bernstein's All the President's Men and Marie Brenner's article, The Man Who Knew Too Much. It was later made into a hit made-for-TV film.


The book centers around F. Ross Johnson, who is the CEO of R.J.R Nabisco but is planning to buy out the rest of the Nabisco shareholders. One of the reasons Johnson is trying to buy the company is due to the likely market failure of the company's smokeless cigarette called Premier.


The opposition to Johnson's bid for the company is one of the pioneers of the leveraged buyout, Henry Kravis and his cousin George R. Roberts. Kravis was the first person Johnson talked to about doing the LBO, and feels betrayed after learning that Johnson wants to do the deal with another firm, American Express's former Shearson Lehman Hutton division. Ted Forstmann and his Forstmann Little buyout firm also played a prominent role.


After Kravis and Johnson are unable to reconcile their differences, a bidding war takes place which Johnson will eventually lose. The unfortunate side effect of the augmented buyout price to the shareholders is the creation of a worrying level of debt for the company.


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