Summary
Barbarians at the Gate chronicles the epic battle for control of RJR Nabisco, a colossal conglomerate built on tobacco and food brands. The story unfolds in the late 1980s, a time of rampant corporate takeovers and leveraged buyouts, epitomizing Wall Street's unchecked ambition. At the heart of the drama is F. Ross Johnson, RJR Nabisco's CEO, a charismatic and flamboyant executive known for his lavish spending and shrewd maneuvering. Johnson's saga begins with his rise through the ranks of Standard Brands, where he orchestrates a boardroom coup, ousting his penny-pinching mentor and setting the stage for his signature leadership style: fast-paced, deal-driven, and unapologetically indulgent.
The narrative then shifts to Nabisco Brands, a company steeped in tradition, where Johnson clashes with its established culture while simultaneously engineering its merger with RJR, forming a corporate behemoth. His reign is marked by constant reorganizations, extravagant perks, and a growing detachment from the company's core operations. Johnson's focus shifts almost entirely to two things: enjoying the high life and manipulating RJR Nabisco's stock price. When the stock underperforms, it becomes the catalyst for his most audacious move yet: a leveraged buyout, the largest in history, aiming to take the company private.
Johnson's proposal ignites a fierce bidding war, attracting Wall Street's biggest players, including the legendary Henry Kravis of Kohlberg Kravis Roberts & Co. and the ambitious Peter Cohen of Shearson Lehman Hutton. The battle escalates into a high-stakes poker game, marked by secret meetings, backroom deals, and increasingly hostile public relations campaigns. The narrative exposes the egos, greed, and machinations of the financial world, as the bidders clash over not just shareholder value, but also their own Wall Street reputations.
As the auction intensifies, the special committee of RJR Nabisco's board, tasked with overseeing the process, grapples with its own ethical dilemmas and conflicts of interest. The directors, once charmed by Johnson's charisma, grow increasingly disenchanted by his lavish spending and the unprecedented compensation package he has carved out for himself and his management team. Public outrage over the perceived greed of the buyout fuels a national debate on the morality of corporate takeovers and the potential dangers of excessive debt.
The story culminates in a dramatic showdown, as the final bids are submitted and the board makes its decision. Kravis emerges victorious, acquiring RJR Nabisco for a staggering $25 billion, but the victory is far from clean. The narrative highlights the devastating impact of the buyout on RJR Nabisco's employees and communities, particularly in Winston-Salem, North Carolina, the company's historical home. The tale of RJR Nabisco serves as a cautionary reminder of the human cost of Wall Street's insatiable appetite for deals, a legacy that continues to resonate in the business world today.