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Barbarians at the Gate: The Fall of RJR Nabisco

Bryan Burrough,

John Helyar

4.26 · Rating details · 29,539 ratings · 794 reviews

A #1 New York Times bestseller and arguably the best business narrative ever written, Barbarians at the Gate is the classic account of the fall of RJR Nabisco. An enduring masterpiece of investigative journalism by Bryan Burrough and John Helyar, it includes a new afterword by the authors that brings this remarkable story of greed and double-dealings up to date twenty year ...more

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Paperback, 592 pages

Published December 13th 2005 by HarperBus (first published January 1st 1990)

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May 18, 2008 Suzanne rated it really liked it

Shelves: nonfiction

Read this in 1991 just after it first came out. I couldn't put it down. If you don't understand the financial pages of newspapers and the terms they use, this is an easy way to learn about acquisitions, hostile takeovers, liquidity, assets, etc. Perhaps a bit dated now, but the author (a financial journalist) describes what happened here in the States in the 80's, a time when small businesses (and huge ones like RJR Reynolds) were bought out, sometimes just for the land they were built upon. The ...more

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Oct 15, 2011 Rebecca rated it it was amazing

Shelves: history, nonfiction

I try to rate books based on how well they achieve their own objectives, and I think this one nails its goals perfectly. Corporate finance is labyrinthian by nature--to understand what actually happened in any given deal requires being able to track the money, the legal manuverings, and the easily ignored but incredibly critical personal relationships. (When I was a child, I thought that business deals were made based off of what was most profitable for the company. It turns out in real life, fa I try to rate books based on how well they achieve their own objectives, and I think this one nails its goals perfectly. Corporate finance is labyrinthian by nature--to understand what actually happened in any given deal requires being able to track the money, the legal manuverings, and the easily ignored but incredibly critical personal relationships. (When I was a child, I thought that business deals were made based off of what was most profitable for the company. It turns out in real life, far more important factors are who plays golf with who and who is still pissed about not getting onto the board of some third company two years ago.) Barbarians at the Gate involves hundreds of people, with literally dozens of main characters (helpfully listed out by firm in the front of the book, a list you will return to again and again). They interviewed almost all of them personally, and include critical backstory for everyone involved, along with corporate histories, notes on legal ramifications, explanations of obscure financial procedures, and an overview of the history of the financial industry in general. Every bit of it is important.

That's not to say I enjoyed all of it, but my discomfort was never boredom. More just that I've been in enough meetings and contract negotiations to watch quite a lot of similar decisions being made, and some of this was close enough to home to raise my blood pressure by proxy.

The sheer hubris of some of these people is shocking. The CEO effectively kicks over this hornet's nest because he's bored and anxious about personal problems, and likes to stir things up for the sake of change. His stated reason for starting the LBO is incredibly weak--he's concerned about the stock price and thinks they're undervalued. He says he did it for the stockholders. (The company's stable at the moment and raking in money, which can be either plowed back in to make the company stronger or handed out dividends. As far as I can tell, doing short-sighted things to raise your stock price only benefits your stockholders if they then sell your stock. At which point, they stop becoming your stockholders. Now you have new stockholders, who own artificially inflated stock whose price cannot be sustained, who you have screwed from the very beginning. Honestly, I think trying to raise stock price "for the stockholders" is an asinine policy. The only way that raising the price will continue to benefit your stockholders is if you've done so by actually making your company more valuable--inventing new products, finding new markets, and investing in long term stability. Blowing it up via financial tricks does you no good in the long run--which (spoilers!) is exactly what happens here.)

But he's not the only one. The board have their own egos (and financial investments) to protect. Each of the bidding firms cannot afford to lose out on the biggest deal ever, but almost no one factors in their respective desperations, which leads to a spiral of increasing hysteria as each party is surprised when someone else trumps them.There are mysterious leaks to the press, back channel betrayals, ranting Cassandras, and a mad sprint through Manhattan when a traffic jam delays a critical bid. It's completely absorbing and a little sickening at the same time.

This is a sausage-making book, as in, the more you know about what goes into high finance, the more horrified you're likely to be. As I'd mentioned, I've been exposed to some similar shenanigans, albeit on a much smaller scale, but it rings true. This is real-life high drama, featuring political manuverings that make and break fortunes as well as destroy jobs and lives across the country. The fallout still influences the behavior of CEOs and investment banks today. One might expect a detailed financial history to be boring, but that ignores the fact that the driving force behind any such deal is the relationships between the people, in all their brilliant, vain, loyal, treacherous, ambitious, flawed glory. ...more

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Nov 25, 2008 Arminius rated it it was amazing · review of another edition

Shelves: business

Barbarians at the Gates is a fascinating tale about the rise and fall of food giant Nabisco. Ross Johnson was head of Nabisco’s rival Standard Brands. They show how he used his affable personality and his ability to befriend coworkers, bosses and over-seeing boards to propel himself to Standard’s CEO while winning a battle against his superior and getting his superior ousted. Nabisco had gained competition from Frito Lay and Proctor Gamble so it looked to expand, buy merging with Standard Brands Barbarians at the Gates is a fascinating tale about the rise and fall of food giant Nabisco. Ross Johnson was head of Nabisco’s rival Standard Brands. They show how he used his affable personality and his ability to befriend coworkers, bosses and over-seeing boards to propel himself to Standard’s CEO while winning a battle against his superior and getting his superior ousted. Nabisco had gained competition from Frito Lay and Proctor Gamble so it looked to expand, buy merging with Standard Brands. Johnson negotiated the merger as head of Standard Brands with Nabisco. He agreed to let Nabisco CEO Bob Schaeberle head the combined companies while he remained second in command. He charmed Schaeberle and Nabisco board members and he moved Standard Brand employees into key positions. He had all night parties with his coworkers drinking to excess yet still able to plan out business strategies. He palled around with sports celebrities like Frank Gifford and insisted on the use of corporate jets to do so.

Nabisco did well, under a never- sit-still ran business, under his guidance. He made business acquisitions and sold others. He then succeeded Schaeberle when Schaeberle retired.

Then the book looked at RJ Reynolds Tobacco. It is a little confusing that the book made a sudden shift to detailing the history of Reynolds but you figure out that this company was to be the next venture Mr. Johnson got involved with. Reynolds was huge company during the 1970’s when cigarettes were so popular. Their big winner was the brand Camel. But to Reynolds consternation, the Surgeon General announced that cigarette smoke caused cancer. So Reynolds anticipated a decline in sales and looked to diversify into other areas. Nabisco and Johnson were ready to accept their vision.

So they combine. Ross Johnson, as head of Nabisco, agreed to let RJ Reynolds chief Tylee Wilson head the combined company and be his second in command. Ross Johnson is so coy though. He charmed Wilson and RJR Nabisco’s newly created board of directors to get almost everything he wanted including RJR Nabisco’s fleet of airplanes.
Wilson fell out of favor with the board for not informing the board of his secret project to create a smokeless cigarette. As a result the board dumped him and replaced him with Ross Johnson.

Ross Johnson as head of RJR Nabisco continued his shake up ways. He enjoyed his lavish lifestyle as RJR N stock price dropped from the mid $70 per share to the 50’s.

This kind of action did not bother other CEO’s as long as they were making a profit. RJR were certainly making huge profits but it was a good reason, in Johnson's eyes, to shake things up again.

He left hints that he was looking at another merger to boost stock prices. Leveraged buy out (LBO) companies became interested. Johnson, enticed by the riches he can obtain through an LBO encourages a friend at American Express owned Shearson Lehmen to buy out RJR Nabisco.

Wall Street vultures found out and pursued Johnson with LBO buyout offers. What I got from the book is that it wasn’t Shearson Lehman who was going to get to enrich Johnson and themselves with an LBO but it was going to be between LBO orchestrator giants Kravis/ Roberts and Forstmann Little. Adding to the drama was Ted Forstmann’s extreme dislike of Kravis's chief Henry Kravis.

To my surprise, Forstmann Little drops out. Then out of nowhere a down trotting company named First Boston comes up with a soon expiring tax loophole to orchestrate an LBO takeover which amounted to over 3 million dollars in additional profit.

It became a game of Shearson, Kravis and First Boston all in for the play. After weeks of haggling First Boston’s plan did not sit well with the RJR Nabisco board but managed to drive up the cost of the buy-out to $109 per stock share. Kravis had the most reliable financing plan so they won the bid despite Shearson’s $112 bid.

Ross Johnson got the axe when Kravis took over but he left with his stated goal of raising the stock price. In fact, it doubled. However, he left a great company in shambles and received a $53 million dollar separation package for his work.
...more

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Jan 01, 2011 Nick Black rated it liked it

Shelves: yuppie-bullshit

went up to the parents' house over christmas, and found this in the garage, and was like "what? the parents don't read books" and, worried it might be mistaken for a delicious meal, grabbed it. there's some purple fucking prose in this book! Here's how not to write compelling narrative, kids:

The atmosphere at Tuesday morning's breakfast between Cohen and Kravis was no worse than that inside any commercial meat locker.

It's about as bad as All the President's Men, but the material kinda saves the went up to the parents' house over christmas, and found this in the garage, and was like "what? the parents don't read books" and, worried it might be mistaken for a delicious meal, grabbed it. there's some purple fucking prose in this book! Here's how not to write compelling narrative, kids:

The atmosphere at Tuesday morning's breakfast between Cohen and Kravis was no worse than that inside any commercial meat locker.

It's about as bad as All the President's Men, but the material kinda saves the effort. What personalities! What bling! What social-climbing wives! Fair Atlanta, described as the glamorous Empire City of the South that she is! Cigarettes! South-vs-North struggle! I swear solemnly that people will one day reminisce of me also:

....gracious in defeat. Arriving at Nine West, the first thing he did was open the bar.

I'd never considered "open the bar" as a verbal phrase, but I love it. But yeah, this effort was basically two frat guys jabbering over a typewriter, cigars ashing freely, shirts flying open to reveal great Scotch-built bellies, good old-fashioned white male fun. An absolutely untrustworthy book, unreferenced and unknowable details aren't so much papered-over as gleefully thrust upon the reader. Pillow talk between married couples is quoted at dialogue's length. Inner thoughts of unnamed looker-ons are detailed, and presented as fact. Are we to gulp down this tissue of horse shit? Are we to take these glib lies like a greased and nameless asshole? What wondrous Fairiaes provided these unfacts? Who facilitates these crude and stumbling thrusts of explicative derring-do?

In fact, this book was terrible. The story is crazy, though, and well worth reading. More than anything, it has made clear something I've long suspected: to make the real money, you've long had to to be a lawyer or banker, not because these require any particular skill but because they're closest to the money, and to the rules regarding that money (through the economic era, anyway. You used to need serfs. Serfs are no longer allowed; like the first Internet Boom, I was born a few years too late to cash in. Though, really, a King is surely just the Archlawyer of the Realm?). Thankfully, through the dual magics of high-speed trading and venture capital, computer scientists are finally getting in on this gravy train as well.

http://www.youtube.com/watch?v=56u6g0...

I hope the authors are penniless and being flayed by some Kafkan Commandant, but somehow doubt it. I don't want to live on this planet anymore.
...more

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Nov 25, 2008 Tammy rated it liked it

11-07-08
This tsunami of details in this story of the leveraged buy-out of RJR Nabisco would be mind-numbing if it were not for the sharp anger at the incessant and insatiable greed it highlights.

One feels an eerie sense of déjà vu reading this book. The RJR Nabisco takeover battle was fought in 1988, but the unmitigated (and unregulated) greed on the part of Wall Street seems to only have changed in form, not in magnitude. It borders (then and now) on the obscene.

This book is not for the faint o ...more

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Jul 19, 2007 Sean Sullivan rated it really liked it

If you haven’t noticed, I am a connoisseur of the business bestseller. I read ‘em all, and this one is among the best. This, Den of Thieves and the Informant are as good as these books get. Here we got conniving and scheming on a massive scale. Extremely unlikable rich assholes brought low by equally unsavory, but way smarter rich people.

It’s the story of an attempt to take RJR Nabisco private, and then a series of take over attempts that were instigated by the original privatization plan. Johns ...more

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Oct 09, 2013 Amar Pai rated it liked it

Shelves: enjoyed-flipping-through

This book is weird. It's written like a taut spy-thriller, and superficially it's a "page-turner"-- everything on the page seemed very exciting and I kept wanting to read it. But the stuff being written about-- the tale of some investment bankers fighting over who gets to buy RJR Nabisco-- is boring beyond belief. Lots of arcana about leveraged buy outs, endless paragraph-long sketches of interchangeable middle-aged white guys engaged in a financial dick swinging contest, pages upon pages devote ...more

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Nov 10, 2009 Anita rated it liked it

Detailed - and downright shocking - display of the egos and attitudes of hundreds of real people involved in the biggest private equity buyout of its day (and until relatively recent days). Describes far too many people to follow and too much detail, but the sheer magnitude of greed, excess and penis envy is amazing.

The DVD of the same title gives the abridged version of the story. It's quite hard to follow the story without knowing the background from the book. DVD also emphasizes Linda Robinso

...more

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Feb 17, 2019 Amy David rated it really liked it · review of another edition

Shelves: global-economics-and-history

If you're at all interested in how investment banking and Wall Street make money by doing nothing of value to society, this is a great read. It's long, but the authors have done a good job of breaking things down and making the narrative suspenseful to the end, even with zero likable characters.

I just wish the latest edition came with an appendix on how to build a guillotine.

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Dec 02, 2015 Kurtbg rated it liked it

Shelves: fiction-non, business-economics

Corporations back in the day were established to create products and provide services and have certain laws and rights applied to the organization and its employees. Not so starting in the late eighties.

This book chronicles a selling-off of a major corporation in the late nineties: RJR Nabisco.

As the role of CEO has become more prominent the greed and ego of those in positions have risen. At some point a CEO wanted a bigger fiefdom so they thought it would be smart to combine a food company wit ...more

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Oct 10, 2014 Simon Lau rated it it was amazing

This book was recommended to me by a business school professor who referred to it as "the best business book on private equity." As someone who studied finance at NYU and a lifelong student of history, I was intrigued.

The book turned out to be a wonderful read. I learned a tremendous deal about private equity, the mid-to-late century evolution of finance on Wall Street, and the important role of corporate governance in business. Some of these points were not discussed on an academic level (e.g. ...more

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Apr 14, 2018 Michael Hutchings rated it really liked it

Any who has an interest in mergers and acquisitions will love this book. Or anyone who has an interest in an absolutely amazing story. And it's all true, which is even more amazing.

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Dec 13, 2017 Sanjay Vyas rated it it was amazing

Shelves: business-related

Knowing something of corporate finance, I loved this. The book presumes some familiarity with that topic.

Amazing picture of greed and venality. Very eye-opening.

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Oct 14, 2009 MisterFweem rated it it was amazing

Read this one again. It's worth reading more than once. Still five stars. Even better after reading Benjamin Barber's "Consumed."

It's probably because I don't get around much, but I've only seen one depiction of greed that I thought was funny, and that's the one from The Addams Family, in which Gomez Addams shows the impostor Fester how to get to the money vault by pulling on the book titled "Greed" on the bookshelf.

Then there's the other kind of greed, the greed that is just nasty, heartless, s Read this one again. It's worth reading more than once. Still five stars. Even better after reading Benjamin Barber's "Consumed."

It's probably because I don't get around much, but I've only seen one depiction of greed that I thought was funny, and that's the one from The Addams Family, in which Gomez Addams shows the impostor Fester how to get to the money vault by pulling on the book titled "Greed" on the bookshelf.

Then there's the other kind of greed, the greed that is just nasty, heartless, shameful and yet shameless, as epitomized in Barbarians at the Gate, a wonderful non-fiction book by Bryan Burrough and John Helyar. In the book they paint a picture of egos and cash chasing after RJR Nabisco, a conglomerate that makes everything from cigarettes to Oreo cookies. I found the book at a library sale over the weekend, and feel like the dollar I spent buying it was well spent (Sorry to the authors; but I rarely buy new books these days. In fact, it's been at least ten years since I last bought a new one). The story was so captivating I had to read it midstream, interruping my reading of Max Hastings' Nemesis, which si good, but just not as compelling.

So what makes Barbarians so compelling? It's the perspective. Over the weekend, we got a little perspective ourselves. We're looking for a new vehicle, one to replace our van but one that has the towing capacity to haul our camper. So we went to the local Toyota dealership and started looking at SUVs. Bad idea. Though they have what we want, their prices are just insane -- out of our price range, to the tune of $30,000 to $35,000. It all made the deal my father-in-law offered us on his Honda Pilot, at a mere $14,000, look a lot better, so we're going that route again.This ties in with Barbarians because with the amounts of money involved in competing attempts to buy RJR Nabisco, there is no perspective. Billions of dollars flying through the air, pushed there by men and companies poised to make millions in fees. And little of the money they're playing with is their own.

Soak this in a bit:

There were, Finn admitted, some unique problems to be ironed out. For one thing, deferring $3.5 billion in taxes -- a conservative scenario -- was unprecedented. According to Finn's calculations, this single transaction would boost the annual federal budget deficit by 2 percent. If first Boston proposed it, RJR Nabisco's board would almost certainly have to take into account the political fallout. "It's clear," Finn said, "that Washington would go apeshit."
No kidding. But as Theodore Forstmann, senior partner in Forstmann Little & Co., one of the firms that vied to buy RJR Nabisco in 1988, said, "It's like Alice in Wonderland. The reason Kravis can pay these incredible sums is that his money isn't real. It's phony. It's funny money. It's wampum." Of course, Forstmann is talking here of the junk bonds of the 1980s, but in my perspective, when you're playing with billions of dollars, it is all funny money and wampum; such amounts have no basis in reality because none of us can imagine spending that much money on something, not even skee-ball.

That's the perspective I gained from the book. Anybody who plays with insane amounts of money -- whether they're corporate raiders or the federal government -- has lot perspective on what they're actually doing, or spending. It's all funny money or wampum. A billion here or three billion there is meaningless when you're dealing in hundreds of billions, or trillions. If a little leaks out along the way, it doesn't matter, because there's always more wampum where that comes from. So spend, friend, spend.

I'm sure, unfortunately, that the greed depicted in Barbarians is eclipsed by what's gone on in the past few years, from Enron to the mortgage meltdown. I'm grateful that we have fine writers like Burrough and Helyar to chronicle these kinds of things. but it's a truism in the business world, especially in New York, that the kinds of shenanigans displayed in this book are cheered on by the business press and the business world in general, unless the deals go sour and people don't make money. Everyone wants to be their friends (even their enemies) until the accusations start. ...more

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Nov 09, 2019 Vicki rated it really liked it

Listened to the abridged audio version. Good summary. Didn’t care for the narrators.

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Jun 08, 2014 Biafra rated it it was amazing

Shelves: written_review, finished_2014

The tale of Ross Johnson, the CEO of RJR Nabisco who sets the book's plot into motion, and the frenzied time leading up to the final decision on who'll win the leveraged buy out (LBO) bid and take ownership of RJR Nabisco is fascinating. The authors do an excellent job of providing background for the many people involved in the final bids, much of which is crucial for understanding their motivations and decisions.

For example, the rise of Johnson through the ranks of Standard Brands, the late ni The tale of Ross Johnson, the CEO of RJR Nabisco who sets the book's plot into motion, and the frenzied time leading up to the final decision on who'll win the leveraged buy out (LBO) bid and take ownership of RJR Nabisco is fascinating. The authors do an excellent job of providing background for the many people involved in the final bids, much of which is crucial for understanding their motivations and decisions.

For example, the rise of Johnson through the ranks of Standard Brands, the late night drinking brainstorming sessions he has with those whom have risen with him, and his constant need to have change going on around him provide adequate background to explain his somewhat puzzling decision to think up and execute the idea of a LBO of RJR Nabisco: essentially the share price isn't where he wants it and he thinks RJR Nabisco is becoming staid.

The resulting frenzy of action unleashed by the (at the time) largest LBO in history, from Henry Kravis's (whom Johnson originally talked to about the LBO) wheeling and dealing to scrap together the money to enter the LBO bid to the surprise introduction of First Boston and their off-the-wall strategy to make a deal happen, kept the story going at a good pace and the authors did a nice job of flipping between different storylines to keep things from going stale.

The book also give a great idea of how much the personalities of those involved in the business deal affect the decisions made. For example, Ted Forstmann's hatred of junk bonds caused trouble as others sought to use these as collateral for the LBO while the involvement of Bruce Wasserstein, formerly of First Boston, helped spur First Boston to make a bid.

In addition, it provides an overview of different financial devices---junk bonds, securities, and others---that one hears on the news but are not commonly put into context of how they are normally used.

Overall, an excellent journalistic endeavor and a non-stop thrill from start to finish. The authors give a highly detailed account of the players' backgrounds and motivations along with enough detail about the events to paint a good picture of events. Even better, they refrain from passing their own judgement during the book, which help the reader draw their own conclusions and allows one to understand (to a degree) why particular decisions were made without pre-conceived biases.

Highly recommended. ...more

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Jun 03, 2015 Preston Kutney rated it really liked it

Shelves: business

This book paints a grim picture of high finance and corporate excess. Although I'm fairly certain most of this wouldn't fly today because of how hard it is to keep secrets, and the media's scrutiny of corporate missteps. (a la Volkswagen, Exxon, to name a few recent cases)

Essentially, Ross Johnson rises to CEO of RJR Nabisco through playing politics, scheming with his band of merry men, and schmoozing board members. He constantly shakes up the company because he gets bored easily, and goes snif ...more

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Jul 04, 2014 Joris rated it really liked it

This book displays and describes the nature of the NJR Nabisco management in one of the biggest LBO's ever. Sometimes you have to check, am I reading a kindergarten manifest with grown up words or do these people exist for real? The tactics, backstabbing, gossiping and most of all the foul mouthing is bizarre and thus intriguing.., it's a huge read but well worth it if you're interested in leveraged buyouts, upper management, conglomerate companies and Chief Exec's who have lost contact with us ...more

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Aug 18, 2015 James rated it really liked it

When you run out of Eichenwald books to read, most algorithms point you here. For much of this book, that's an apt recommendation. It's a large, well-sourced, tomb that is a dense tick-tock of a specific corporate situation. The difference, is that Eichenwald tends to exam corporate malfeasance and the ne'er-do-wells getting their comeuppance. Here, well, Ross Johnson & crew to some degree are rewarded (though their malfeasance is not great as Eichenwald's subjects - maybe just their greed). In ...more

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Jun 05, 2014 Gwyn Wilkinson rated it did not like it

Gave up on this, it's written like a soap opera about Great Men who do Important Things without any political or historical context, meaning the more you read the less you feel like you understand. I got it thinking it would be like Liar's Poker, which is an inside look at modern finance's workings and how its people tick, but here the author understands corporate people even less than he understands junk bonds or whatever. If you want to know how corporate finance works, or you want to read a h ...more

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May 21, 2017 Achyuth Sanjay rated it it was amazing

"You can't make this stuff up."

An absolutely riveting read, chronicling the RJR LBO story from the 80s. The authors have done a really good job at making this eminently readable and accessible, and one doesn't need beyond a basic knowledge of financial instruments to understand most of the things. And the volume of the book only speaks to the sheer journalistic effort they have put into this, while at the same time not allowing it to become boring at any point. It took me a while to get through ...more

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Nov 29, 2015 Nikolaos rated it it was amazing

Recommends it for: Business students

I have not read such an exciting business book for a while. "Barbarians" is an outstanding account on the insights of the LBO world, written by two reporters with an appetite for refined ridiculousness. I was amazed at the relevance of the reported absurdities with contemporary criticism on Big Finance, though nowadays the spotlight was set on proprietary and algorithmic trading.

If you are into business case studies or just historical accounts of grand corporate events, this book is for you.

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Sep 16, 2018 David rated it it was amazing

Shelves: big-white-square

"'we were charging right through the rice paddies, not stopping for anything and taking no prisoners.'"

This was FUN! So much so that I went and bought loads of non-fic/faction about Wall Street. What is it with me and the 80s? If I'm not reading about AIDS, I'm reading about Gordon Gekkos.

Anyway, everyone in this is just a monster. And whilst "Barbarians at the Gate" is a doozy title, it's total crap. They're all barbarians. It should be called "A Shitstorm of Evil Bastards".

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Feb 25, 2016 Lydia rated it really liked it

I started reading this book because it was on the "must read" business book list. I kept reading all 500 pages because it was really, really interesting! Yes, much of that is because I am currently a business nerd, but the way businesses operated at that time, especially with such a large amount of money on the line, is fascinating.

Not for every reader, which is why it is only at 4 stars here, but really a 4.5/5 in my book

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Nov 26, 2015 Ali Aljawad rated it liked it

good and boring at the same time

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Mar 28, 2016 Dmytro rated it liked it

This is an interesting story but WAY too many details. The book is way too long to read.

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Sep 03, 2018 Ameya Joshi rated it really liked it

If you ever thought non-fiction cannot be as exciting as fiction, this is the book to prove you wrong. An absolute page-turner to beat any thriller. I literally powered through the last half of the book over a couple of days – work or no work. As the epilogue says – the raw material for the story was quite crazy and incredible in itself, but the ability of the authors to recreate for us the scenes of not just the few weeks in late 1989 but months and years preceding that is amazing (and god know If you ever thought non-fiction cannot be as exciting as fiction, this is the book to prove you wrong. An absolute page-turner to beat any thriller. I literally powered through the last half of the book over a couple of days – work or no work. As the epilogue says – the raw material for the story was quite crazy and incredible in itself, but the ability of the authors to recreate for us the scenes of not just the few weeks in late 1989 but months and years preceding that is amazing (and god knows how they managed that in just 9 months!)

I was a little skeptical about the morality (and legality perhaps?) of recreating some of those scenes (especially conversations between 2 friends, husband and wife etc.) – it is one thing to do so in fiction and with your own characters, but just makes me uneasy regardless of how many people have been spoken to and how honest they think they’ve been. I suppose it’s in the larger interest of 'artistic license' and 'readability' and if no one sued the authors I guess we can trust them.

It also reiterates what anyone who has worked for even a little while would know – the most important of decisions (whether it is big business, politics or sport) are taken for the most irrational of reasons, egos and chance. Little do we realise what makes the world go round .

I don’t think the book has aged well though for 2 reasons :
1) When written the backgrounds of these characters would have been fascinating, they’re all real people in the newspapers day in and day out. I’d be fascinated to read about today’s tycoons and understand them better. But 25+ years later, in another country – I found all the background a bit unnecessary and long to plod through. The backgrounds also became impossible to keep up with after a point of time (I could only remember Johnson’s straight) and the search feature on the kindle has never been handier… Every book is a commitment of time and this is a long book which could be much shorter in this day and age.

2) The key plot point – the finance - wasn’t broken down well enough for a non-finance audience at all. The core demographic they were targeting back when released was probably people who worked in finance or Wall Street, who had followed this in the newspapers and therefore may have been familiar with an LBO, the junk bond crisis, PIKs et al. Don’t think these are that common in 2018 for a layperson and I had to go to YouTube and see some videos about LBOs, read up on my own to even get a basic hang of what’s going on. It’s still a fascinating story without understanding this but I’d have expected to have had this broken down to me in a tome this large.

PS : Keep Googling the characters (even the minor ones) you encounter in this book. A lot of them are now dead, other more junior ones are big fish and it's fascinating to see how their obituaries and current profiles recognize them in hindsight. Almost all of them call out their role in this book which is a great reminder as to it's significance and role in shaping the zeitgeist. ...more

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May 14, 2019 Caroline rated it it was amazing

It was a bit slow for the first 100 pages or so, but once it got into the actual story I couldn't put it down. It was dramatic, and informative, and helped crystallize a lot of things I'm confused about, like:
- How do companies work? Like in basic economics, you think about market participants each trying to maximize their profits, and everyone acting in their own interest ends up maximizing total welfare, and that makes sense in a zoomed-out way, and as far as I can tell is not a crazy model of It was a bit slow for the first 100 pages or so, but once it got into the actual story I couldn't put it down. It was dramatic, and informative, and helped crystallize a lot of things I'm confused about, like:
- How do companies work? Like in basic economics, you think about market participants each trying to maximize their profits, and everyone acting in their own interest ends up maximizing total welfare, and that makes sense in a zoomed-out way, and as far as I can tell is not a crazy model of the behavior of companies. But how do companies end up behaving this way?

My very uninformed impression of how companies work is something like:
- there is a CEO, who is a guy
- there is a board, consisting of a bunch of guys who are friends with the CEO
- they all have fiduciary duties and if they fail to meet them they will get yelled at by a judge in Delaware
- ???
- shareholder value gets maximized

This book was simultaneously scary and reassuring on this topic, portraying people's incentives as pretty far from aligned with economic efficiency. This is scary, for obvious reasons. But also reassuring, because it's kind of relatable. Money is nice, but it's so abstract; it's some numbers on a piece of paper. I'm way more motivated by things like revenge, or the desire to prove that I was right, or making guys think I'm attractive, or getting nice articles written about me in the newspaper, or expensive perks. (You can buy perks with money, but it's not really the same if you have to buy it yourself.)

And so is everyone in this book, and it is reassuring that the whole system seems to kinda work anyway.

- Finance: good or bad? And how do you tell?

The book doesn't really explore this that much, and most of the anti-LBO voices have dumb moralistic objections. But it does kind of feel like whenever you package and reallocate some risk, there is some tradeoff in which you might be increasing systemic risk but it's opaque and hard to measure.

Anyway, it was great, and if you are like me you will find a lot of intensely relatable moments, e.g.

“The initial projections they had obtained from RJR Nabisco was a heading ‘other uses of cash.’ Beside it was a row of figures stretching out ten years, each year ranging from 300 to 500 million dollars. Was it cash flowing in or out? Should he add it? Subtract it? Ignore it?” ...more

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Jun 06, 2020 Aaron added it

A deal completely of its time — as of 1988, the biggest leveraged buyout in history. The book, which has been called the best business book ever, is also of its time. It’s mostly straight reporting on the goings-on of “deal guys”. A fair chunk is a timeline of the cut and thrust of competing bids in a frenzied environment, including financing considerations, main deal points and the level of due diligence.

This is not to say that the authors don’t have a perspective on this. With one eyebrow rais ...more

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Oct 28, 2018 Anh rated it it was amazing

A book that every mergers and acquisitions analyst and private equity analyst should read. A comprehensive picture of the then largest leveraged buy-out in the history, including the historic formation of the target company, the generous corporate perks enjoyed by a corrupt management and the cunning designs of all participants, many of whom just wanted a piece of the big cake. They are ‘barbarians at the gate’.

It’s even more interesting to look back at the deal after 20 years in the book’s 20th ...more

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About Bryan Burrough

Bryan Burrough

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Bryan Burrough joined Vanity Fair in August 1992 and has been a special correspondent for the magazine since January 1995. He has reported on a wide range of topics, including the events that led to the war in Iraq, the disappearance of Natalee Holloway, and the Anthony Pellicano case. His profile subjects have included Sumner Redstone, Larry Ellison, Mike Ovitz, and Ivan Boesky.

Prior to joining ...more

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“Planning, gentlemen, is ‘What are you going to do next year that’s different from what you did this year?’” he told them. “All I want is five items.” — 2 likes

“Everyone in the room knew about leveraged buyouts, often called LBOs. In an LBO, a small group of senior executives, usually working with a Wall Street partner, proposes to buy its company from public shareholders, using massive amounts of borrowed money. Critics of this procedure called it stealing the company from its owners and fretted that the growing mountain of corporate debt was hindering America’s ability to compete abroad. Everyone knew LBOs meant deep cuts in research and every other imaginable budget, all sacrificed to pay off debt. Proponents insisted that companies forced to meet steep debt payments grew lean and mean. On one thing they all agreed: The executives who launched LBOs got filthy rich.” — 2 likes

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