The following are examples of LBOs except:
A) KKR and RJR Nabisco
B) America Online and Time Warner
C) KKR and Beatrice
D) Thompson and Southland

Question

Quizplus · Accepted Answer

An LBO (leveraged buyout) is a type of acquisition where a company is purchased using a significant amount of borrowed money, which is often secured by the assets of the company being acquired. The examples given in choices A, C, and D are all well-known LBOs in which private equity firms (KKR in all three cases) used significant amounts of debt to purchase the companies in question. However, America Online and Time Warner did not go through an LBO process; instead, they merged in 2000 in a deal that was structured as a stock-for-stock transaction rather than a debt-financed acquisition.

The Following Are Examples of LBOs Except