Data privacy and cyber-security risks play an increasingly prominent role when evaluating a potential corporate merger or acquisition target. Knowing how to manage these risks could mean the difference between a smooth M&A transaction and one that quickly turns into a liability nightmare for the buyer.
Verizon’s acquisition of Yahoo in February 2017 provides a recent, high-profile example. Verizon ultimately decided to move forward with the acquisition, even after discovering that Yahoo had suffered two massive data breaches, compromising over one billion user accounts.
In a Feb. 21 filing with the Securities and Exchange Commission, detailing an amended deal, Verizon said Yahoo will retain 50 percent of “certain post-closing liabilities arising out of governmental or third-party investigations, litigations, or other claims related to certain user security and data... To get the full story, subscribe now.