From: jmatrow@donald.WichitaKS.NCR.COM (John Matrow)
Newsgroups: comp.sys.ncr,comp.sys.att,comp.sys.novell
Subject: Novell to buy USL
Date: 21 Dec 92 21:56:03 GMT
Distribution: world
Organization: NCR Corporation, Wichita KS

For Immediate Release:
Novell signs Letter of Intent with AT&T to ACQUIRE Unix system
laboratories.
     Summit, N.J. -- December 21,1992 -- Novell, Inc.
(NASDAQ:NOVL) and AT&T jointly announced today they have signed a
letter of intent for Novell to acquire UNIX System Laboratories.
USL is a subsidiary of AT&T that provides computer vendors with
the UNIX operating system and related software and services based
on open, international standards for computing and communications.
     Under the terms of the letter of intent, existing shares of
USL common stock would be exchanged for up to 12.3 million newly
issued shares of Novell common stock in a tax-free merger
accounted for as a purchase.  Novell would issue approximately
11.1 million shares of common stock to the current non-Novell USL
shareholders.  In addition the outstanding USL stock options and
other equity incentives would be exchanged for Novell stock, or
options, or rights to acquire shares of Novell stock, all in
accordance with the terms of USL employee plans and the definitive
agreement.
     AT&T owns approximately 77 percent of the outstanding shares
of USL.  Novell currently holds approximately 5 percent of USL's
outstanding stock, and 11 other investors hold approximately 18
percent.
     The signing of the letter of intent has been approved by the
boards of directors of Novell and AT&T, but the merger remains
subject to the approval of USL stockholders, regulatory approvals,
the signing of a definitive merger agreement and other normal
conditions to closing.  The acquisition is expected to be
completed during the first calendar quarter of 1993.
     "Our support of UNIX systems, as evidenced by our earlier
investment in USL and the joint creation of Univel, has been
driven by the widespread use of UNIX at our customer sites and by
our desire to work closely with our industry partners,"  said
Raymond J. Noorda, president and chief executive officer of
Novell.  "This acquisition is being done at the urging of
customers who have asked us to support the UNIX system directly
and integrate it more fully within the NetWare environment.  This
reflects the growing importance of UNIX systems which are
increasingly being used for rightsizing business applications on
computer networks."
     Novell recognizes and values the importance of UNIX as an
open accessible technology to OEM partners and customers around
the world.  As part of Novell, USL's commitment to fair and
neutral access to UNIX technology will not change.
     Robert M. Kavner, AT&T group executive for communications
products, reiterated what the company has said since 1991 that
AT&T intended to reduce its ownership in USL, but that AT&T
remains firmly committed to the UNIX system.  "Associating USL
with Novell, another strong company, will allow USL to be an even
more effective and flourishing force in the software industry,"
Kavner said.
     Roel Pieper president and chief executive officer of USL
said, "The two best technologies for open systems and
interoperability are coming together within one company.  The UNIX
system provides reliable, secure sophisticated capabilities for
network computing applications.  The NetWare environment provides
integrated cross-platform system services.  The combination of the
two enables distributed computing solutions to be deployed simply
and cost effectively from desktops to mainframes."
     USL will become a wholly owned subsidiary of Novell,
maintaining its operations in Summit, New Jersey.  USL was formed
in 1991 around AT&T's UNIX Software Operation which had its roots
in AT&T Bell Laboratories.  Annual revenues are in excess of $80
million.
     In April 1991, AT&T sold a portion of its total interest in
USL to a number of computer industry concerns.  AT&T said then it
took that action to ensure the growth of UNIX System V and open
operating systems by establishing an independent unit with
business oversight by investors who would ensure that USL was
operated for the good of the industry as a whole, along with
technical input on product directions by other industry groups.
     Other USL investors are:  Amdahl Corporation, FUJITSU,
Limited, ICL Plc., Institute for Information Industry, Motorola,
Inc., NEC Corporation, OKI Electric Industry Co., Ltd., Ing. C.
Olivetti & Co. S.p.A., Sun Microsystems, TATA Consultancy Services
and Toshiba Corporation.
     The proposed transaction would be accounted for as a
purchase.  On this basis, the acquisition could result in a one-
time write-off by Novell of up to $250 million in the fiscal
quarter in which the transaction closes.  Most of the remaining
cost of the purchase would be amortized over five to fifteen
years.  The Novell shares required for the transaction will
represent approximately 4 percent of the outstanding shares of
Novell common stock.
     For AT&T and other USL shareholders the exchange of shares
within the proposed transaction will be tax free.  Based on
current Novell stock price, AT&T would expect to recognize a gain
at the time of closing in excess of $100 million in net income.
     When the acquisition is completed, AT&T would hold
approximately 3 percent of Novell's common stock.  Kavner
emphasized that AT&T viewed its holdings in Novell as an
investment and that AT&T had no plans to be involved in USL or
Novell's operations or business decisions.
     USL develops and markets the UNIX System V operating system,
the TUXEDO Enterprise Transaction Processing System and other
standards-based system software products to open systems computer
vendors worldwide.  USL also provides education and management
consulting for UNIX systems and related technologies.
     AT&T is a global communications and computer company, with
total 1991 revenues of $63.1 billion.  It operates the world's
biggest and most advanced long distance network and provides
communications services and products, as well as network equipment
and computer systems, to businesses, consumers, telecommunications
service providers and government agencies.
     Novell, Inc. is an operating system software company and
developer of network services and specialized and general purpose
operating system products, including NetWare and UnixWare
products.  Novell's NetWare network computing products manage and
control the sharing of services, data and applications among
computer workgroups, departmental networks and across business-
wide information systems.

Novell, Inc  Peter Troop  408-473-8361
AT&T  Dick Gray 908-221-5057
UNIX System Laboratories  Larry Lytle 908-522-5186



-- 
John Matrow   Systems Integration, NCR Peripheral Products Division
 NCR:654-8851 <John.Matrow@WichitaKS.NCR.COM>
(316)636-8851 <uunet!ncrlnk!ncrwic!john.matrow>
 FAX:636-8889 "Call (316)636-8628 to have array info faxed to you"