Mergers and acquisitions (M&A) are exciting milestones. They can mean growth, expansion, and new opportunities. But in today’s digital-first world, they also come with serious cybersecurity risks that can easily be overlooked.
Imagine acquiring a company only to find out it’s riddled with cyber vulnerabilities or has been quietly breached. Suddenly, your investment becomes a liability. That’s why understanding and managing cybersecurity risks during M&A isn’t optional it’s essential.
At Futurism Technologies, we’ve helped organizations across industries navigate digital risks during high-stakes M&A events. Based on that experience, here are 7 practical, easy-to-understand tips to help protect your business throughout the deal-making journey.
1. Make Cybersecurity Part of the M&A Conversation – Early On
Too often, cybersecurity is brought in late in the M&A process usually after the deal is nearly done. That’s a big mistake.
Instead, include cybersecurity checks right from the start. Just like you would review financials or legal risks, do the same for digital assets and systems. The earlier your cybersecurity team or partner (like us!) gets involved, the better they can spot red flags before they become deal-breakers.
2. Dig Deep with Cyber Due Diligence
Cyber due diligence is more than a quick scan. It means thoroughly assessing the target company’s:
- Network infrastructure
- Security controls
- Past data breaches (if any)
- Regulatory compliance (like GDPR, HIPAA, etc.)
- Third-party risks
Think of it like a health check for their entire digital ecosystem. If there’s a history of lax security or suspicious activity, that’s something you want to know before signing on the dotted line.
3. Look at More than Just IT Systems
When evaluating cyber risk, it’s easy to get tunnel vision and only look at technology. But the human side matters just as much.
Ask questions like:
- Are employees trained in security best practices?
- Are employees following good password hygiene and using multi-factor authentication (MFA) for added security?
- Is there a clear security culture in place?
Human behavior is frequently the most vulnerable aspect of any cybersecurity strategy. Understanding their habits and security mindset is key.
4. Watch for Shadow IT and Hidden Vulnerabilities
Not all tech used by a company is officially sanctioned. Employees often use personal devices, cloud apps, or third-party tools that aren’t monitored by IT. This is called shadow IT, and it can be a major security blind spot.
Unmonitored or unofficial tech tools often called shadow IT can introduce unseen risks during mergers and acquisitions. That’s why it’s critical to run discovery scans and audits to uncover any unsanctioned tools or software. Once identified, you can assess and mitigate the risks.
5. Plan for Integration Before You Merge Networks
After the deal closes, there’s usually a rush to combine networks, systems, and data. But moving too fast can lead to security gaps.
Take time to create a careful integration plan that includes:
- Network segmentation
- Access controls
- Security policy alignment
- Identity management across both companies
A phased and well-planned integration minimizes disruption while keeping data and systems secure.
6. Prepare for Regulatory and Compliance Issues
Every industry has its own cybersecurity regulations. When you acquire a company, you also inherit its compliance responsibilities and its potential violations.
Make sure to:
- Check for any past or ongoing regulatory issues
- Confirm certifications and audit histories
- Identify any gaps in data privacy laws like GDPR, CCPA, HIPAA, etc.
Non-compliance can lead to hefty fines and reputational damage, so don’t leave this unchecked.
7. Have a Post-Deal Cybersecurity Roadmap
Your job isn’t done after the ink dries. It’s crucial to include cybersecurity in your strategy for integrating systems and operations after a merger.
This includes:
- Updating policies and procedures
- Re-evaluating access permissions
- Re-training staff
- Monitoring systems for anomalies or threats
- Reviewing and consolidating cybersecurity tools
A clear roadmap ensures that both organizations are aligned under a single, secure framework moving forward.
Real-World Example: The Marriott and Starwood Breach Fallout
One of the most widely discussed cybersecurity incidents tied to a merger took place in the U.S. when Marriott finalized its purchase of Starwood Hotels during the 2016 merger deal. What Marriott didn’t discover until two years later was that Starwood had been the victim of a major data breach even before the acquisition.
The breach exposed the personal information of over 500 million guests, including passport numbers and credit card data. Because Marriott didn’t identify the breach during due diligence, it inherited not just Starwood’s assets but also its cybersecurity baggage.
The fallout? Massive reputational damage, lawsuits, and regulatory scrutiny including a proposed $123 million fine by the UK’s Information Commissioner’s Office.
This case highlights why early cybersecurity due diligence is critical. Had Marriott detected the breach before the acquisition, the story and the damage might have looked very different.
To read more case studies like this Click here.
Final Thoughts
M&As bring plenty of opportunities but also plenty of digital risks. By making cybersecurity a priority throughout the process, you’re protecting your investment, your customers, and your future.
At Futurism Technologies, we help organizations across the globe build smart, scalable, and secure digital foundations especially during times of transformation like M&A. Our cybersecurity experts work hand-in-hand with IT and legal teams to make sure nothing slips through the cracks.
Let’s make your next merger or acquisition not just successful but secure from day one.
Ready to talk cyber due diligence? Get in touch with our cybersecurity experts