Barbarians at the Gate: The Fall of RJR Nabisco

Barbarians at the Gate: The Fall of RJR Nabisco is a 1989 book about the leveraged buyout (LBO) of RJR Nabisco, written by investigative journalists Bryan Burrough and John Helyar. The book is based upon a series of articles written by the authors for The Wall Street Journal.[1] The book was later made into a made-for-TV movie by HBO, also called Barbarians at the Gate. The book centers on F. Ross Johnson, the CEO of RJR Nabisco, who planned to buy out the rest of the Nabisco shareholders.

Barbarians at the Gate: The Fall of RJR Nabisco
First edition
AuthorBryan Burrough and John Helyar
LanguageEnglish
GenreNon-fiction
PublisherHarper & Row
Publication date
1989
Media typePaperback
Pages592
ISBN0-06-016172-8
OCLC20491096
338.8/3664/00973 20
LC ClassHD2796.R57 B87 1990

Summary

Those opposed to Johnson's bid for the company, Henry Kravis and his cousin George R. Roberts, were among the pioneers of the leveraged buyout (LBO). 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.

The title of the book comes from a statement by Forstmann, in which he calls Kravis' money "phoney junk bond crap" and declares him and his cousin as "real people with real money," also stating that to stop raiders like Kravis: "We need to push the barbarians back from the city gates."

Important personalities
  • F. Ross Johnson, president and CEO, RJR Nabisco
  • Ed Horrigan, president and chief executive officer of R.J. Reynolds Tobacco division of RJR Nabisco
  • Edward J. Robinson, chief financial officer of RJR Nabisco
  • Peter Cohen, chairman and chief executive, Shearson Lehman Hutton
  • Nick Forstmann, senior partner, Forstmann Little & Company
  • John Greeniaus, president and chief executive officer of Nabisco division of RJR Nabisco
  • Charlie Hugel, chairman of the board, RJR Nabisco
  • Henry Kravis, senior partner, Kohlberg Kravis Roberts & Co.
  • George R. Roberts, senior partner, Kohlberg Kravis Roberts & Co.
  • Jim Robinson, chairman and chief executive, American Express

Film adaptation

The book was adapted by Larry Gelbart for a 1993 television movie of the same name directed by Glenn Jordan.

Publishing information and reception

In 2008, Harper Collins re-released Barbarians to mark the two-decade anniversary of the RJR deal. Media columnist Jon Friedman at MarketWatch opined on the occasion that it was "the best business book ever." Friedman spoke with the authors about the two-decade history of the book and of their ensuing careers (the two undertook no further joint projects).[2] Business reporter Andrew Ross Sorkin of The New York Times wrote in his book Too Big to Fail that this is his favourite business book of all time.

References
  1. O'Toole, Patricia (January 21, 1990). "The Granddaddy of All Takeovers" – via NYTimes.com.
  2. "'Barbarians at the Gate' authors reflect" by Jon Friedman, MarketWatch, 11-21-08. Retrieved 2-7-09.
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