Rjr Nabisco Inc Case Study

RJR Nabisco, Inc. was an American conglomerate formed in 1985 by the merger ofNabisco Brands and R.J. Reynolds Tobacco Company, a leading producer of food products (Shredded Wheat, Oreo cookies, Ritz crackers, Planters peanuts, Life Savers, Del Monte Fruit and Vegetables, and Snickers Chocolate) as well as Winston, Camel and Salem cigarettes. In 1999, due to concerns about tobacco lawsuit liabilities, the tobacco business was spun off into a separate company, and RJR Nabisco was renamed as Nabisco Holdings Corporation. Nabisco is currently owned by Kraft Foods. KKR & Co. L.P. formerly known as Kohlberg Kravis Roberts & Co.w a s founded in 1976 by Jerome Kohlberg and cousins Henry Kravis and George R. Roberts, all of whom had previously worked together at Bear Stearns, where they completed some of the earliest leveraged buyout transactions. KKR & Co. sponsors and manages private equity investment funds and famously specializing in leveraged buyouts, based in New York. Since its inception, the firm has completed over $400 billion of private equity transactions and was a pioneer in the leveraged buyout industry. KKR's has completed a number of landmark transactions including the 1989 leveraged buyout of RJR Nabisco, which was the largest buyout in history to that point. After 1987 resignation of Jerome Kohlberg at age 61, Henry Kravis as a succeeded senior partner and George R. Robert were responsible for the 1988 leveraged buyout of RJR Nabisco. In October 1988, F. Ross Johnson who was the President and CEO of RJR Nabisco proposed a $17 billion - $75 per share Management Buyout (MBO) of the company with the financial backing of investment bankS h e a r s o n Lehman Hutton and its parent company, American Express.

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