Barbarians at the Gate
| Industry | Conglomerate (Tobacco and Food) |
|---|---|
| Headquarters | United States |
Key people | F. Ross Johnson (CEO), Ed Horrigan (CEO, R.J. Reynolds Tobacco division), Edward J. Robinson (CFO), Eugene Yetman (Chairman of the board) |
| Products | Tobacco products, Food products |
Barbarians at the Gate: The Fall of RJR Nabisco is a 1989 publication authored by investigative reporters Bryan Burrough and John Helyar. It details the leveraged buyout (LBO) of RJR Nabisco, drawing from their reporting for The Wall Street Journal. The book offers a comprehensive examination of one of the most sizable and intricate corporate acquisitions ever undertaken.
The narrative centers on RJR Nabisco’s CEO, F. Ross Johnson, who launched an effort to purchase the company’s shares. This action sparked an intense bidding contest featuring notable figures such as Henry Kravis and George R. Roberts, pioneers in the leveraged buyout field. Kravis asserted that he was Johnson’s original partner in the transaction but felt deceived when Johnson negotiated with Shearson Lehman Hutton, a subsidiary of American Express. Other significant participants included Theodore J. Forstmann of Forstmann Little & Company and First Boston's James Maher together with Jay Pritzker, who presented an innovative yet ultimately unsuccessful proposal.
The rivalry between Johnson and Kravis intensified, culminating in a record-breaking buyout price that substantially raised RJR Nabisco’s debt burden. The title of the book originates from Forstmann’s condemnation of Kravis’ reliance on "phoney junk bond crap," contrasting it with his firm’s "real money" approach and underscoring the necessity to "push the barbarians back from the city gates."
In 1993, HBO transformed the book into a made-for-television film, further dramatizing the business conflict behind this landmark deal.
Important personalities
- F. Ross Johnson, president and CEO, RJR Nabisco
- Ed Horrigan, president and CEO, R.J. Reynolds Tobacco division at RJR Nabisco
- Edward J. Robinson, chief financial officer, RJR Nabisco
- Peter Cohen, chairman and CEO, Shearson Lehman Hutton
- Ted Forstmann, senior partner, Forstmann Little & Company
- John Greeniaus, president and CEO, Nabisco division of RJR Nabisco
- Eugene Yetman, chairman of RJR Nabisco’s board
- Henry Kravis, senior partner, Kohlberg Kravis Roberts & Co.
- George R. Roberts, senior partner, Kohlberg Kravis Roberts & Co.
- Jim Robinson, chairman and CEO, American Express
- Ted Ammon, financier and investment banker
- Charles Hugel, director of special committee
- James Maher, head of investment banking at First Boston
- Kim Fennebresque, investment banker at First Boston
- Felix Rohatyn, managing director, Lazard Freres
- Ira Harris, banker at Lazard Freres
- Jay Pritzker, chairman of Hyatt and member of the Pritzker family
- Thomas Pritzker
- Harry Gray
Film adaptation
In 1993, Larry Gelbart adapted the book into a television movie titled Barbarians at the Gate, which was directed by Glenn Jordan and featured James Garner in a leading role.
Publishing information and reception
In 2008, to commemorate the 20th anniversary of the RJR Nabisco transaction, HarperCollins issued a new edition of Barbarians at the Gate. Jon Friedman, a media columnist for MarketWatch, praised it as "the finest business book ever," highlighting its lasting significance and the subsequent trajectories of its authors. Andrew Ross Sorkin, a business journalist at The New York Times, identified it as his preferred business book in his publication Too Big to Fail.
Further reading
- The Predators' Ball by Connie Bruck
- Den of Thieves by James B. Stewart
- Liar's Poker by Michael Lewis
- When Genius Failed by Roger Lowenstein
- Too Big to Fail by Andrew Ross Sorkin
- The Big Short by Michael Lewis
- King of Capital by David Carey and John E. Morris
- The Smartest Guys in the Room by Bethany McLean and Peter Elkind
- Money Games: The Inside Story of How American Dealmakers Saved Korea's Most Iconic Bank by Weijian Shan