In 2016, Marriott International purchased the Starwood hotel chain in a deal worth $13.6 billion. In November 2018, Marriott notified the public and regulators that in 2014, a breach to Starwood’s network had exposed at least 500 million customer records to cyber criminals. The announcement resulted in Marriott’s stock plunging 5.6 percent. The company faces the potential of massive fines and significant damage to its brand and reputation.
When companies conduct mergers and acquisitions, the monster lurking beneath the bed is the threat of undiscovered or undisclosed security breaches. Those discoveries can wreak havoc on the acquiring company after the deal, and on the target company if a breach is discovered before the deal’s closing. Yahoo’s past data breaches were discovered during Verizon’s bid to acquire the internet giant for $4.8 billion in 2016. Verizon cut roughly $350 million from the offer as a result. Yahoo’s parent company had to cough up another $50 million in damages to settle the accompanying consumer lawsuit.
The due diligence process for M&A deals is…
