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Barbarians at the Gate

Barbarians at the Gate

By John Helyar & Bryan Burrough

The Fall of RJR Nabisco. HarperBusiness Essentials, 2003.

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20 mins read

17 Key insights

A brief summary of Barbarians at the Gate

The spellbinding tale behind the battle for control of RJR Nabisco and its impact on Wall Street, presented by the former investigative reporters who covered the story as it unfolded.

Key insights in Barbarians at the Gate

1
What do you get from this book? The true story behind the RJR Nabisco buyout that transformed Wall Street
2
Though the leveraged buyout policy was created to pass on inheritances, it was corrupted so executives could obtain companies cheaply
3
The rebellious “noncompany” businessman led Standard Brands into a successful merger with Nabisco, then set his sights higher
4
The 1984 merger between Nabisco and RJ Reynolds was an odd but crafty move designed to increase profits
5
Johnson began showing an interest in leveraged buyouts early after the merger, which increased after RJR Nabisco’s move to Atlanta
6
Investment firm KKR tried talking Johnson into an LBO, but Johnson wanted to shop around first
7
Working with a new investment firm, Johnson put together a low-ball proposal that upset board members and angered Kravis
8
Forstmann was determined to prevent Kravis from winning RJR with junk bonds, which he believed gave companies an unfair advantage
9
The bidding war grew hotter and more desperate when Kravis and Forstmann began competing for Johnson and Cohen’s support
10
Frustrations escalated among Johnson’s camp, causing Forstmann to walk away and sign on to a new deal with Goldman Sachs
11
Wall Street was scrutinized by the press as LBOs were condemned by public officials, leaving RJR Nabisco with an uncertain future
12
First Boston swooped in out of nowhere with a high but insubstantial bid and got the deadline extended
13
KKR won the final bid despite Johnson offering the greater price per share
14
Johnson took his defeat gracefully, though Wall Street’s greed only increased in the following decades
15
Summary of the key insights
16
Selected critiques in brief
17
Final word

Who should read Barbarians at the Gate

Entrepreneurs • stockbrokers • historians • economists • politicians • anyone with an interest in Wall Street

About the author of Barbarians at the Gate

Bryan Burrough and John Helyar are former investigative reporters for The Wall Street Journal. Their work on the RJR Nabisco case earned them the 1989 Gerald Loeb Award. Burrough won two additional Gerald Loeb Awards for his journalism and has appeared on Today and Good Morning America. Heylar’s solo work has also appeared in Fortune magazine and Bloomberg News.

author avatar

John Helyar

author avatar

Bryan Burrough

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