Risk-Management-in-Merger-and-Acquisitions
18
Sep

The Importance of Risk Management in Merger and Acquisitions

Although cybersecurity jobs can be very tedious, organizations will know how important it is whenever there is a breach. However, most organizations overlook risk management when it comes to Mergers and Acquisitions (M&A). Furthermore, organizations will need the help of a cybersecurity professional to secure their IT infrastructure and data during mergers and acquisitions.

In this article, we will talk about the need for cyber risk management during the M&A process. Most of the organizations overlook the security aspects during merger and acquisitions. Thus, security leader should ensure the acquisitions are secure and follow the proper security protocols. It also helps to know the security changes to make after a merger and acquisitions.

What are Mergers and Acquisitions?

A merger is known as joining two or more business organizations to form a new entity. However, acquisition involves transferring ownership of an entity’s stocks, equity assets, or interests. Furthermore, mergers and acquisitions are made to increasing market share and plant size, diversifying product and services, geographic expansion, gain market power, and several economic benefits.

What are the cyber risks associated with mergers and acquisitions?

For risk management, an organization needs to know all the risks associated with mergers and acquisitions. Some of the common cyber risks associated with mergers and acquisitions are stated below.

General Cyber Threats

The global cost of cybersecurity is estimated to reach $6 trillion by 2021. In fact, it is estimated that the global cost of cybercrime per minute will reach $11.4 million by 2021. Without due cybersecurity diligence, your existing portfolio and investment could become a part of this cybercrime ecosystem.

Executing the Deal

When executing a deal with a third-party, both buyer and seller must make a note to maintain all cybersecurity measures, especially during the transfer of data. Ensuring that both parties take safety precautions is a must.

Business Value Propositions

Technology is both a boon and a bane. While smart technology and robotic devices are built to ensure productivity, they also expand the cyber threat horizon. Ensure that all  assets are diligently secured before being brought into a secure system.

How to manage cyber risks in M&A

Analyze Your Cyber Landscape

Not all deals fit a pre-made mold. That is why it is important to first evaluate the current threat landscape to identify any bad actors, both internal and external, that may target both parties during the M&A.

Access Cyber Risks

Much like how one would assess security through a software development life cycle, it is important to assess cyber risks through the entire process of the typical deal life cycle. This will also allow for a benchmark of cyber readiness to be established that can be applied to different business portfolios created to assess new investments as well.

Conclusion

During the merger and acquisition process, many companies focus on the gain from the deal, the ways to improve profit, the margin of growth to experience, etc. However, most companies do not focus on cybersecurity management and risk management.

As a cybersecurity professional, it is your duty to encourage organizations to opt for enterprise risk management training to avoid cybersecurity threats after mergers.

One of the most notable security risk management courses you can join is EC-Council’s Certified CISO (CCISO) course. The main aim of the program is to produce top-level information security executives. Furthermore, you will not only focus on technical knowledge but also on the ways to apply information security management principles from the executive point of view.

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