Mergers and Acquisitions Just Got a Whole Lot Riskier - Here's What You Need to Know

Mergers and acquisitions can be a great way to expand a business and drive momentum, but the process of integrating two or more companies can also be a complex and challenging one. One of the key areas where this complexity can manifest is in cybersecurity. When two companies come together, they bring with them their own unique set of cybersecurity risks and challenges. These risks can have serious consequences if left unaddressed, including data breaches, system downtime, and reputational damage.

One of the main reasons why cybersecurity is such a major concern during mergers and acquisitions is that it can be difficult to get a clear picture of the cybersecurity landscape of the target company. This is partly because cybersecurity information is often highly sensitive and not publicly disclosed. As a result, it can be hard for the acquiring company to know exactly what it is getting itself into. Is the target company using outdated software or systems that are vulnerable to cyber attacks? Are there any known security vulnerabilities that have not been addressed?

Another challenge that companies may face during mergers and acquisitions is integrating the cybersecurity systems and processes of the two companies. Different companies may have different cybersecurity cultures and approaches, and these can be difficult to reconcile. For example, one company may have a very strict approach to cybersecurity, while the other company may be more relaxed. Bringing these two approaches together can be a challenge, especially in a short period of time.

There are also risks associated with the integration of systems and data. When two companies come together, they may need to share data and systems in order to integrate their operations. However, this can create security risks if not done properly. For example, if the two companies have different levels of access control, this can create vulnerabilities that can be exploited by hackers.

In addition to these risks, there is also the risk of insider threats. When two companies come together, there may be employees who are unhappy about the change and may seek to cause harm to the company. This can be a particular concern in industries where employees have access to sensitive data or systems.

So, what can companies do to mitigate these risks? One of the most important things is to conduct thorough cybersecurity due diligence before the merger or acquisition. This should include reviewing the target company's cybersecurity policies and procedures, as well as assessing its overall cybersecurity posture. Companies should also consider hiring a third-party expert to conduct this review, as they may be able to identify vulnerabilities that the company itself may not be aware of.

Once the merger or acquisition has taken place, companies should also prioritize the integration of cybersecurity systems and processes. This should include implementing a unified cybersecurity approach across the company, as well as training employees on cybersecurity best practices. Companies should also ensure that they have the right tools and technologies in place to monitor for and respond to cybersecurity threats.

Finally, companies should be prepared for the unexpected. No matter how thorough the cybersecurity planning and preparation, there is always a risk that something will go wrong. Companies should have incident response plans in place, as well as a crisis communications plan to manage the fallout in the event of a cybersecurity incident.

In conclusion, while mergers and acquisitions can be a great way to expand a business and drive momentum, they also come with an array of cybersecurity risks and challenges. By conducting thorough cybersecurity due diligence, prioritizing the integration of cybersecurity systems and processes, and preparing for the unexpected, companies can help to mitigate these risks and ensure a successful merger or acquisition.