The Hidden Cybersecurity Risks of M&A

Source: Dark Reading

Author: Denny LeCompte

URL: https://www.darkreading.com/cyber-risk/hidden-cybersecurity-risks-mergers-acquisitions

ONE SENTENCE SUMMARY:

Ignoring cybersecurity during mergers and acquisitions exposes businesses to hidden vulnerabilities, compliance issues, and costly security breaches post-acquisition.

MAIN POINTS:

  1. Mergers involve inheriting digital footprints including endpoints, credentials, and hidden security vulnerabilities.
  2. Cybersecurity is frequently neglected in due diligence, creating substantial risk post-acquisition.
  3. IT integration chaos often leads to insufficient access control and outdated credential management.
  4. Legacy systems from acquired companies pose significant cybersecurity threats if not assessed.
  5. Employees are vulnerable to phishing scams during transitions, increasing insider threat risks.
  6. Inadequate cybersecurity training can result in sensitive data leaks and breaches post-merger.
  7. Regulatory and compliance mismatches between companies can create serious legal and financial liabilities.
  8. Comprehensive cybersecurity audits must evaluate identities, compliance histories, and past breaches.
  9. Companies should promptly standardize security policies and adopt modern, cloud-native security solutions.
  10. Proactive cybersecurity integration during mergers is essential to protect reputation, trust, and financial value.

TAKEAWAYS:

  1. Prioritize cybersecurity due diligence alongside financial and operational assessments.
  2. Enforce strict access control policies and revoke outdated credentials immediately post-acquisition.
  3. Conduct thorough audits of legacy IT systems and address incompatibilities proactively.
  4. Implement cybersecurity awareness and anti-phishing training programs early in the merger process.
  5. Align quickly with the strictest compliance standards from both companies to mitigate regulatory risks.