From the course: Managing Your Cybersecurity Program through a Merger or Acquisition

Course content snapshot

From the course: Managing Your Cybersecurity Program through a Merger or Acquisition

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Course content snapshot

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- Let's start this course with a real-life merger and acquisition deal to exactly show you the important role cybersecurity can play in these transactions. In 2017, Verizon was all set to purchase Yahoo. This deal would have helped them secure a highly competitive position in the market as a top global mobile media company and accelerate their revenue growth. But just before the deal went through, Verizon found out that Yahoo had a major data breach in 2013. They discovered as much as 3 billion user accounts were stolen, including usernames, email addresses, telephone numbers, date of birth, et cetera. This, of course, became a major topic of discussion at the negotiating table with Yahoo, and it greatly affected the final price of the deal. In the end, Verizon obtained a $350 million discount, which was a significant drop from the original purchase price they were planning to pay. Now, imagine if Verizon had not done a thorough audit of Yahoo and had not discovered this data breach before the final deal went through. It would have inherited the responsibility to manage the data breach and its aftermath, causing huge financial losses, legal battle settlements, regulatory fines, and investigations. It may have also caused major brand damage and a significant reduction in customer trust due to Verizon's inability to protect user data. Significant resources and efforts would have been diverted to address the data breach, slowing integration and strategic growth plans, causing a distraction from its own strategic growth focus. It could have been really bad. That is why all merger and acquisition deals require careful planning and execution. So if the new organization does not have a good security posture, or has critical vulnerabilities in their environment, or already have an active data breach, joining the networks or separating them can put both companies at risk. With many data privacy laws which has come into play today, like GDPR, CCPA, et cetera, security and data privacy have become the most important elements of these transactions. To prevent data breaches and other cybersecurity issues from negatively impacting these M&A deals, companies must conduct cybersecurity due diligence assessments and implement appropriate security measures or controls to protect against potential risks. It can take anywhere from six months to two years to complete an M&A deal, and there are many parts that need to work together in order for it to be successful. However, if even one thing goes wrong, the whole deal can fall apart. In this course, you will learn all about the importance and process of performing cybersecurity due diligence assessments to assess and address cybersecurity risks in these transactions.

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