In today’s world, businesses are more connected than ever, but that also means they are more vulnerable to cyber threats. When companies merge or one buys another (called M&A or mergers and acquisitions), they look at financials, operations, and potential profits. However, many still fail to check something just as critical, cybersecurity.
The Invisible Threat
Cybersecurity risks can be like an unseen landmine. A company might seem healthy on paper, but if it has weak cybersecurity, it could be a disaster waiting to happen. Hackers target companies before, during, and after these deals, looking for gaps in security to steal sensitive data or cause disruptions.
One example is the Yahoo data breach. When Verizon bought Yahoo in 2017, it was later revealed that Yahoo had suffered two massive cyberattacks that affected billions of users. This significantly reduced Yahoo’s value and caused legal and financial headaches for Verizon.
The Cost of Ignoring Cybersecurity
- Financial Losses: If a company is hacked after an acquisition, it could lead to lawsuits, fines, and expensive security fixes.
- Reputation Damage: Customers lose trust if they find out a company didn’t protect their data.
- Operational Disruptions: Cyberattacks can shut down operations, delaying profits and growth.
Making Cybersecurity a Priority
Businesses need to make cybersecurity a key part of due diligence (the process of checking a company’s health before a deal). Some steps they can take include:
- Performing Cyber Risk Assessments: Identifying vulnerabilities before signing a deal.
- Reviewing Past Incidents: Checking if a company has had security breaches and how they handled them.
- Implementing Strong Security Policies: Ensuring proper safeguards are in place before and after the acquisition.
Cybersecurity is no longer optional—it’s essential. Companies that ignore it during mergers and acquisitions risk losing money, trust, and stability. In today’s digital age, a strong cybersecurity strategy is just as important as financial and legal checks when making business deals.