Former RJR Nabisco chief F Ross Johnson dies at age 85

F Ross Johnson, the colourful businessman whose profligate spending and involvement in one of the most high-profile buyouts of the 1980s made him for many a symbol of the decade’s excess and ambition, has died aged 85.

He died on December 29 in Jupiter, Florida, where he had a home with his wife Susan, according to an announcement on Saturday from the Aycock-Riverside Funeral and Cremation Center.

Johnson was best known for his attempt to take RJR Nabisco Co, the cigarettes-to-cookies conglomerate, private via a leveraged buyout in 1988. It led to a fierce battle — depicted in the book Barbarians at the Gate — that he ultimately lost to KKR in a complex $25bn deal that was at the time the biggest in corporate history.

His professional failure, however, proved to be a boon for his personal finances, and he walked away with a ‘golden parachute’ that reports put between $23m-$50m at the time. Johnson is quoted in a 1989 Fortune article as saying he had no regrets. “The thing that makes me so comfortable is that I did what I was paid to do — get value for shareholders.”

The deal came at the end of 1980s, a decade that was defined by a heady mix of greed, ambition and financial innovation that fed a frenzy of merger activity. According to a 1992 Harvard Business Review article, the total value of M&A between 1987 and 1990 reached nearly $850bn, “dwarfing” the total value of deals cemented in the first six years of the decade.

Johnson was well known for his corporate excesses, perhaps best highlighted by his use of corporate jet. In a story told in Barbarians at the Gate, Johnson’s beloved dog Rocco had bitten a security guard, raising concerns he could be taken by authorities. So he was flown on the corporate jet from Palm Springs to Winston-Salem under the passenger name ‘G Shepherd’.

Frederick Ross Johnson was born in December 1931 and brought up in Winnipeg, Canada, his father a hardware salesman and his mother a book-keeper. After graduating from the University of Manitoba with a degree in commerce, where he excelled at basketball and was president of his fraternity, he started work as an accountant at General Electric in Montreal. Johnson subsequently moved to Toronto, where he also earned a masters degree, to become a salesman. There, he honed his skills in drinking and schmoozing clients, according to Barbarians at the Gate.

When he was in his 40s he moved to Standard Brands, a food and drinks company, and became president in 1975. It was here that he proved that he was better at selling companies than he would be in his future attempt to buy one. He sold Standard Brands to Nabisco in 1981 and, after securing the position of president of the merged entity in 1984, subsequently sold it to tobacco company RJ Reynolds Industries. It was as president of RJR Nabisco that he and a group of executives, advised by Shearson Lehman Hutton, made a failed attempt to take the maker of Oreos and Ritz crackers private, having been unable to boost the company’s share price back to its pre-stock-market crash levels of around $70.

Having been acquired by KKR, RJR Nabisco entered the 1990s — a decade defined by long and costly litigation against Big Tobacco — saddled with high debt and struggling to compete against Philip Morris’ Marlboro Man. After several restructurings, Nabisco was sold in 2000 to Philip Morris, which the following year merged Nabisco with its food subsidiary Kraft. The tobacco arm of RJR Nabisco sold its international business to a Japan Tobacco, while in 2004 the domestic business merged with Brown & Williamson (then owned by British American Tobacco).

After leaving RJR Nabisco Johnson set up his own investment firm in Atlanta and retired in Florida.

Johnson was described by Stanley Katz as “incredibly intuitive”, in a 1988 New York Times article quoting the advertising pioneer. He “operates from the gut. A lot of other executives demand lots and lots of research”, he said.

His willingness to push boundaries made him unlike many of the company men working in corporate America in the 1970s and 1980s. But when it came to the takeover war that was unleashed for ownership of RJR Nabisco, maybe that was just a step too far.