AT&T buys NCR
Sale price: $7.4 billion
Remember those fun and powerful AT&T (T) computers businesses had in the 1990s?
No? Well, the fact there weren't any speaks to the uselessness of the telecom giant's purchase of NCR (NCR).
Even the old-school name of the company, National Cash Register, should have been enough to give AT&T pause before thinking this was a revolutionary deal. Nevertheless, in 1991, the purchase went through and AT&T shelled out $7.4 billion, abandoning in the process its foray into computer making known as AT&T Computer Systems, perhaps hoping that the purchase would move the stalled effort in a new direction.To be fair, NCR was, and is, a leader in point-of-sale equipment, barcode scanners, ATMs and check processing systems. On that basis alone, one can see how AT&T hoped to bolster its portfolio of business services. The deal proved disastrous, though. By 1993, the new subsidiary lost more than $1 billion. In fact, for three years, its biggest customer was actually its owner, AT&T, meaning money was merely being swapped from one pocket to another. AT&T started chipping away at the subsidiary, selling two divisions to Hyundai. NCR was spun off and, by 1997, was back to life as its own, stand-alone company. The reason the deal ended so poorly is fairly obvious in hindsight. If AT&T wanted to launch a technology division tailored to the communications industry, it somehow eluded execs' thinking that the customer base would have to be its competitors. Not surprisingly, other telecoms wanted no part in boosting revenues for their top competitor, giving it business and potentially processing and storing vital data using its technology.