RJR Nabisco was formed when R.J. Reynolds, a tobacco company rooted in Winston-Salem, North Carolina, since 1875, bought Nabisco Brands in 1985 for $4.9 billion in cash and a $1.9 billion stock swap; the combined company took its name in April 1986. It sold KFC to PepsiCo, Canada Dry and Sunkist to Cadbury Schweppes, and Heublein to Grand Metropolitan. F. Ross Johnson took charge in early 1987, judged Winston-Salem too bucolic, and moved headquarters to Cobb County, Georgia, handing the old building to Wake Forest University. In 1988 Johnson and Shearson Lehman Hutton offered $75 a share to take the company private, setting off a bidding war that drew Henry Kravis and KKR.

KKR made a $90 tender offer directly to shareholders, and the final round pitted KKR’s $109 a share against management’s $112. The board took the lower bid because KKR’s was firmly financed, while Johnson’s mix of cash and securities lacked a reset provision to protect its value. A Time cover in December 1988 called the contest “a game of greed,” and Johnson still left in February 1989 with over $60 million. The roughly $25 billion leveraged buyout forced new chief Louis V. Gerstner to move headquarters to the New York area and sell assets, and a 1994 Labor Department report counted over 2,000 jobs lost. In 1999 the tobacco businesses were split off, and Philip Morris bought Nabisco Holdings in 2000.

• In April 1988 RJR Nabisco fired Saatchi & Saatchi, which handled only its food brands, after the agency made a Northwest Airlines ad promoting an in-flight smoking ban.
• Bidders in the frenzy included Morgan Stanley, Goldman Sachs, Salomon Brothers, First Boston and Merrill Lynch.
• To pay down debt the company sold the Walkers and Smiths snack brands, Chun King, Fresh Del Monte Produce and a 20 percent ESPN stake to Hearst.
• Laid-off workers took an average of 5.6 months to find new jobs, and those who did earned less than half their old pay.
• In 2021 the Pandora Papers linked pre-split RJR Nabisco to shell companies set up in Cyprus.