Close this search box.

How to Ensure Cybersecurity During a Merger and Acquisition

Merger and Acquisition Cybersecurity

Mergers and acquisitions can be an exciting time for your company. The future is bright, and new challenges await when one company acquires another. However, one of the primary challenges during a merger or acquisition is maintaining tight information security.

A small oversight can lead to software and monetary damages, hurting your company before you can complete the merger. Here’s what you can do to ensure cybersecurity throughout the process.

Merger and Acquisition Cybersecurity Tip 1 – Evaluate the Current Security

One of the first steps you can take is to assess the current cybersecurity structure in each business. A thorough examination of each company’s processes will show any weaknesses that could make the merger vulnerable to hackers.

Transparency about your company’s cybersecurity is of the utmost importance to you and the company you’re merging with. Gaps in these structures can have a high monetary cost from the security liability and hackers.

When it was preparing for acquisition by Verizon, Yahoo faced a class-action lawsuit based on claims of data breaches. The company had to pay over $100 million to the plaintiffs, renegotiate with Verizon, and cut the acquisition price from $4.83 billion to $4.48 billion.

Merger and Acquisition Cybersecurity Tip 2 – Educate Employees on Cybersecurity Rules

When your business goes through an acquisition, you could be onboarding 20 people or 20,000 people. Mergers — horizontal or vertical or another type — can include hiccups initially. To ensure a smooth transition, new and current employees should learn the proper cybersecurity protocols.

Strong Passwords

When employees start at their new company, they’ll likely need to create accounts and passwords for the new websites and software. Encourage them to use sophisticated passwords using capital letters, numbers, and special characters.

Also, use different passwords for every website. You can use a password manager to help keep track and add another layer of security.

Email Smarts

An easy way to leave a device vulnerable to a cyber attack is to fall for a phishing scam. These suspicious links cause trouble by infecting computers with malware.

About 90% of data breaches occur because of phishing, and it’s only getting worse every year. Show all employees what these scams look like and how to avoid them.

Update Systems

One way to ensure cybersecurity during an acquisition is to update all software. Systems with updated security can much better prevent attacks like ransomware.

In 2017, a worldwide cyber attack occurred at the hands of ransomware called WannaCry. It primarily affected Microsoft Windows computers that had yet to download the latest security patch. In the five years since it happened, WannaCry has caused about $4 billion in damages worldwide.

Merger and Acquisition Cybersecurity Tip 3- Prepare Data for Exchange and Evaluate Employees

One of the most crucial parts of a merger is exchanging data from one company to another. A practical way to start the data transfer is to collaborate with both information technology (IT) departments, so each group knows what’s going on throughout the process.

There are different ways to transfer data, but one of the best strategies is to encrypt it. Encoding the data means only people with the access key can view it.

In an acquisition, running background checks on those handling the encrypted information can help ensure there are no cracks from within. A malicious employee could endanger the data and make it vulnerable to a ransomware attack, and they could intentionally sabotage for money, retaliation, or other motivations. Even if unintentional, a slip-up can cost a company a lot of time, money, and damages.

Assure a Safe Merger and Acquisition

While it can be a thrilling time for a company, mergers and acquisitions also bring risks — especially to cybersecurity. When two businesses come together, millions of dollars are at stake. Even one blunder can cost a company excessive resources spent fixing the damage and dealing with lawsuits.

Being meticulous in each step and covering all bases can ensure a smooth transfer for the new staff and vital information. Evaluate the security structures of both companies, teach everyone the best cybersecurity practices and encrypt backups before they exchange hands.

WIll Sue of Gerent
Data Loss Prevention
Ransomware Attacks on Banks

Explore our topics