📚 Barbarians at the Gate by Bryan Burrough & John Helyar
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I picked this book up after seeing it on many people's list, and after the bird app buyout I wanted to read a story about such a thing. Burrough & Helyar do an incredible job of detailing the origins of RJR Nabisco. Humble roots that were taken for a ride by Ross Johnson, the CEO at the time of the leveraged buyout.
It begins by introducing 3 key figures. Johnson, Henry Kravis and George Roberts. Johnson has an odd leadership style, and is trigger happy on the companies fleet of private jets to fuel his extravagant lifestyle. Henry Kravis and George Roberts are the founders of Kohlberg Kravis Roberts, the private equity firm that will eventually acquire RJR via LBO.
When I say eventually, the deal does not get done until the last chapter of the book. You walk through the history of the company, Johnson's climb to CEO from lightbulb salesman, getting run out of Winston-Salem, NC, the bidding wars on wall street, and all the gossip in between.
As someone who enjoys economic history, the details around the origins of the company were very interesting. It started out in Winston-Salem, NC circa 1875 as a tobacco company, R.J Reynolds Tobacco Company. This company would become one of the most successful in the US, and birthed brands such as Camel. Notorious for aggressive marketing.
1875 is right after the Civil War in the United States. The Civil War destroyed the aristocracy of the South that was built on slavery. The generation that came after saw the industrial north as the future, and the agrarian ways as the past. It become home to some of the most successful entrepreneurs of the early 20th century.
"From this new industrial South emerged a class of entrepreneurs that combined the flamboyance of the Southern gentleman with the shrewdness of the Yankee trader. They were hard-drinking, big-spending, and fiercely competitive."
Fast forward to 1985 when Johnson becomes CEO, and the big-spending fits in just right. He joined R.J. Reynolds Industries in 1978 and put in charge of the company's food business. He grew the business, and even managed to help merge with Nabisco Brands. He had the support of the board, and within a few quarters after the merger, he was CEO of RJR Nabisco.
It was just 3 years later that his leadership style and spending habits would make him the target of a takeover bid by KKR. Everyone wanted a piece of it on Wall St. You get a glimpse of some of the origin stories of names like Cohen, Pritzker, Kravis, and even Bilzerian. Yeah, the one you know of is a trust fund kid. His pops is mentioned in the book.
Overall the book was solid. Did not grab me, but was intersting to see all these names and their hand in the story. I'll never look at Oreo's the same.