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  • Writer's pictureChenyun Chu

Navigating Cybersecurity in Mergers and Acquisitions: A Holistic Approach

Mergers and acquisitions (M&As) are pivotal to the growth strategies of numerous companies, serving as a linchpin for maintaining a competitive edge and propelling ongoing advancement. However, the cyber risks tied to M&As, including vulnerabilities to exploitation and data breaches, are increasingly coming to the forefront as critical considerations.

A Cautionary Tale: Marriott's Acquisition of Starwood

In 2016, Marriott's acquisition of Starwood Hotels and Resorts appeared to be a landmark deal. Yet, an unforeseen challenge lay in Starwood's compromised reservation system, breached by hackers since 2014 and undetected until 2018, affecting nearly 400 million guests. The fallout for Marriott was severe, encompassing hefty fines (approximately $123 million by the UK's ICO), numerous lawsuits, and a tarnished reputation.

This episode underscores the imperative for rigorous cybersecurity due diligence in the M&A arena, spotlighting the potential repercussions of oversight.

Cybersecurity in M&As: A Strategic Imperative

Addressing cybersecurity risks in M&As demands a comprehensive approach, encapsulating meticulous due diligence, strategic integration planning, persistent monitoring throughout the post-merger integration (PMI) phase, and stringent supply chain risk management for newly integrated subsidiaries.

Our in-depth case study delves into a Fortune 500 tech giant renowned for its innovation and rapid growth, highlighting the crucial phases of cybersecurity in its M&A strategy.

Phase 1: Cyber Due Diligence

The initial phase focuses on equipping decision-makers with a nuanced understanding of a prospective acquisition's cybersecurity stance and potential risks. C2SEC's XSPM platform enables:

  • Comprehensive External Attack Surface Analysis

  • In-Depth Automated Penetration Testing

  • Cloud and SaaS Environment Evaluation

  • Expedited Scanning and Assessment

  • Collaborative Security Analysis with Security Team

  • Robust Confidentiality Measures

Phase 2: Post-Merger Integration (PMI) Planning and Execution

The principal objective during the planning and execution stages of PMI was to anticipate potential challenges, devise a comprehensive roadmap for securing the combined entity's assets and data post-acquisition, and successfully execute this plan. C2SEC's XSPM platform aims to provide:

  • Comprehensive Asset and Tech Stack

  • Inventory Continuous Automated Scanning and Monitoring

  • Cloud and SaaS Posture Management

  • SOC or SOAR System Integration

Phase 3: Supply Chain Security for New Subsidiaries

The primary objective of this phase was to ensure the overall security of the enlarged supply chain, which often sees the addition of hundreds of new vendors or partners with each M&A transaction. The challenge was twofold: to discover and categorize new dependencies accurately and to establish strong operational controls over these dependencies, particularly the critical ones. C2SEC's XSPM platform aims to provide:

  • Automated Vendor Dependency Discovery

  • Strong Operational Control Over Critical Dependencies

  • Tailored Vendor Risk Assessment

  • Continuous Automated Monitoring

Outcomes and Insights

The results are clear: the company achieved unmatched visibility into its digital ecosystem, real-time vulnerability detection, context-driven response prioritization, cost optimization, and fortified supply chain security. This case sets a precedent for addressing M&A cybersecurity challenges with C2SEC's holistic, effective solution. By proactively addressing cybersecurity risks in M&As, companies can not only safeguard their assets but also ensure the longevity and success of their growth strategies in the digital age.

Further Reading

For a deeper dive into our findings and methodologies, we invite you to explore the full white paper.


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