August 17, 2015
In a recent Law360 article, McGuireWoods data privacy and security department chair Andrew Konia evaluates the detrimental influence that privacy and cybersecurity can have on M&A deals. Titled “Cybersecurity Concerns Creep Into M&A Transactions,” the August 17 article addresses the growing reluctance of acquiring companies to initiate M&A deals with target companies prone to lax cybersecurity.
In the piece, Konia references a recent survey in which nearly half of the respondents thought that insubstantial cybersecurity can ruin a deal, although a vast majority also pointed out that cybersecurity is not scrutinized during transactions. “There’s a disconnect there,” says Konia in quoted material.
He goes on to consider the inconsistent nature of data privacy policies that can lead to misunderstandings and, in turn, result in companies being unaware of the privacy implications of M&A deals. “One of the real hot issues now is, what are you doing with data and what are you telling your customers you’re doing with data,” Konia adds, referring to how a company’s promise to not transfer data not only applies in an operational context, but in an M&A context as well.
As data privacy and cybersecurity concerns emerge into the forefront of the M&A landscape, Konia encourages sellers to reconsider their privacy policies by taking possible mergers or sales into account from the outset.
Subscribers can read the full story at www.law360.com.