The RJR Nabisco buyout was the 1989 U.S. event often cited as the largest leveraged buyout and a symbol of late-decade junk-bond risks.
RJR Nabisco, a major food and tobacco company, became the target of a fierce bidding contest in 1988. The winning offer came from the investment firm Kohlberg Kravis Roberts, or KKR, in a transaction valued at about $25 billion. Much of the purchase financing relied on debt, including high-yield bonds commonly called junk bonds.
The deal became a public symbol of the aggressive corporate-finance culture of the 1980s. The book and television adaptation “Barbarians at the Gate” later popularized the contest, although the transaction itself was a real corporate takeover rather than a stock-market crash.
The deal is relevant to crash history because the junk-bond market suffered severe stress around 1989 and 1990. It should not be confused with the 1987 Black Monday crash, which occurred two years earlier and had different immediate market dynamics.