AT&T-NCR Deal Gets Mixed Reviews

The American Telephone and Telegraph Company bought itself a front-row spot in the technology marathon this week. Now, computer analysts and experts are curious to see how well it will run. On Monday, the telecommunications giant announced that it had reached an agreement to buy NCR for $7.4 billion. The deal ended a bitter takeover battle and started a host of mixed reviews from the computer industry.

``I think they [AT&T officials] have been smart enough to know that there are things they could learn'' from NCR, says Rob Howe of MicroAge Inc., a worldwide chain of computer dealers.

``I hate to be so negative, but I don't think it's going to work,'' counters Frank Mogavero, a Los Angeles computer reseller. Mr. Mogavero sells both AT&T and NCR computers.

Under terms of the agreement, NCR shareholders would get $110 worth of AT&T stock for every share of NCR they hold.

The agreement still faces hurdles. The tax-free exchange of stock needs approval from the Securities and Exchange Commission, otherwise AT&T will have to pay $3 billion in cash and the rest in stock for the computer company. Also, NCR shareholders must ratify the merger, which they are expected to do.

Both companies say they expect to consummate the deal in four to five months.

Meanwhile, they are working to fulfill AT&T chairman Robert Allen's vision of a telecommunications-computer giant greater than the sum of its parts. Under the plan, the new AT&T-NCR entity would target certain computer-communication industries. In financial transactions, for example, the company could sell computers that record purchases at a store; it would carry those electronic transactions on its long-distance telephone network; then it would sell the bank the computers that process the information.

While that integration looks good on paper, some computer analysts are skeptical the idea will work. Yet financial analysts are optimistic AT&T can shed its own money-losing computer division and gain the more successful NCR computer line. One key question, these analysts add, is how much free reign AT&T will give NCR management. Other high-technology mergers have foundered because of bad management.

NCR chairman Charles Exley Jr., who fought hard against the merger, put the best possible face on the situation at a Monday press conference. ``If you can't remain independent, I can't think of a better partner than AT&T.''

NCR will retain its name and headquarters in Dayton, Ohio. Financial analysts have estimated that up to two-thirds of AT&T's 9,000 computer-related employees could lose their jobs.