NCR Chairman Had 13 Mergers Fail
NCR Chairman Charles E. Exley Jr. likes to point to his own experience--the 13 acquisitions he has participated in during his 36 years in the computer business--as evidence that high-tech mergers don’t work.
“In the end,” he now says, “they all turned out to be a waste of time and money.”
In testimony for state and federal officials and in numerous press conferences, Exley has repeatedly cited American Telephone & Telegraph’s dismal attempts to become a powerhouse in the computer industry and said its intentions of turning its computer business over to NCR to operate can do little but sour NCR’s own business.
“Having lost an estimated $2 billion and gained virtually no market share, AT&T; now appears to have thrown up its hands,” Exley said recently. “It now wants to ‘buy’ expertise in the form of NCR. The history of failure in such mergers has been devastating.”
But AT&T; got a different history lesson.
Although acknowledging that failures have occurred, AT&T; computer systems Vice President William O’Shea said the similarities--from product line to business strategy to corporate culture--between AT&T; and NCR are so great that the combined entity will not face the clashes and identity crises that have plagued other mergers.
Mergers have failed, he said, because the combined entity has been forced to support two separate technologies and customer bases while simultaneously trying to create a merged product line. That won’t happen in this case, he argued.
“We’re looking to bring NCR in to support their computer capabilities with our (telecommunications) networking expertise,” O’Shea said. “We’re not trying to pick them apart to see what fits and what doesn’t. We want them to become our computer company and to operate our computer company.”
Despite AT&T;’s assurances that the marriage it proposes won’t be like any other before it in the technology industry, skeptics abound.
Exley’s view, shared by many, is that mergers between high-technology companies ultimately turn out to be “calamities” because they require so much energy, attention and creative powers of managers that little is left over for the company’s primary business operations. Meanwhile, advances in technology continue at their usual pace.
The upshot? “The competition has a field day at your expense,” Exley said.
To underscore his point, Exley cites Ben Rosen, the respected technology entrepreneur, executive and venture capitalist, who has been quoted as saying the “only winners” in a technology merger are the competitors.
