How can cybersecurity put your merger at risk?

How can cybersecurity put your merger at risk?

1 Expert Answer

Siobhan Gorman

Partner, Washington, D.C.,  Brunswick Group

M&A deals expose companies to significantly heightened cyber risk, as the target company’s technology infrastructure is an important part of the package. If that infrastructure is infiltrated, or the intellectual property has been stolen, the acquirer takes over those problems.

The best way to mitigate cyber risk in an M&A transaction is to reduce the potential for surprise by uncovering and addressing cyber issues before they’re uncovered for you – and ensuring a quick and capable response. Tailored cyber insurance can help manage the financial risk by guarding against a steep drop in valuation.

To safeguard both companies’ reputations, contingency plans should be developed to guide their public responses in the event that a breach is uncovered. After the deal closes, the combined company should assemble a response playbook in the event of different types of cyber incidents. Such a playbook has the added benefit of helping the newly combined leadership team identify and work through strategies, roles and responsibilities.

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