The upward trajectory of merger and acquisition activity in 2024 is already unmistakable. Bolstered by a backdrop of stabilized interest rates and decelerating inflation, coupled with pent-up demand over the last couple of years, the conditions are ripe for strategic transactions.Although the allure of financial gains and market expansion drives these deals, the digital age demands a rigorous assessment of cybersecurity risks accompanying such mergers.
Unanticipated cyber issues, like dormant malware or inconsistent access controls, can transform an ideal transaction into a costly headache for the acquiring company post-merger, endangering critical assets like customer data, intellectual property and financial records. Such vulnerabilities underscore the importance of cyber diligence to prevent data breaches during the M&A process that could invoke severe penalties, cause reputational damage and erode customer trust.
For all these reasons and more, I recommend asking these five crucial cyber questions before finalizing any deal.Before proceeding with an M&A, it's critical to conduct comprehensive due diligence to ascertain the cybersecurity landscape of the target company. This evaluation should encompass their current security measures, data protection practices, identity and access management protocols and incident response strategies.
Clear communication of this unified policy to all stakeholders, including the C-suite and board members, is crucial for maintaining transparency and trust. Cybersecurity is no longer a siloed IT issue—it's a strategic business concern. Gaining the buy-in of C-suite executives and board members ensures that cybersecurity is aligned with the broader business goals.Brokering a profitable M&A requires more than just financial savvy—it demands a proactive approach to cybersecurity.