Kaspersky Explores Strategies to Mitigate Cybersecurity Risks in Business Acquisitions

In a world where mergers and acquisitions (M&A) are on the rise, cybersecurity experts at Kaspersky emphasize the critical need for vigilant cybersecurity measures when engaging in business acquisitions. As the Middle East region experiences a significant surge in M&A activity, with a 42% increase in the total value of deals in Q1 2023 compared to the same period in 2022, businesses are urged to prioritize cybersecurity to mitigate potential risks.

Acquiring or merging with another business inevitably entails the integration of digital systems, networks, and data, making both parties susceptible to cyber threats if not handled carefully.

Alexey Vovk, Head of Information Security Department at Kaspersky, warns, “Cybersecurity must be a focal point when considering business acquisitions, alongside traditional legal, financial, and governance due diligence.”

Key cybersecurity assessments that should be conducted before acquiring a new business include:

1. Existing Cybersecurity Measures: Investigate past cybersecurity audits, even if self-conducted.

2. Valuable Digital Assets: Identify and assess the security of critical digital assets, such as websites, in the case of e-commerce platforms.

3. Hosting and Data Management: Evaluate the reputation of the company’s web hosting provider and address any past security incidents.

4. Security Standards: Depending on the nature of the business, adhere to specific cybersecurity standards and establish baseline security to counter common threats like ransomware.

5. Company Reputation and Data Breaches: Research previous data breaches and remediation efforts to safeguard the company’s reputation and mitigate legal consequences.

However, Vovk cautions that employee errors can also lead to significant data breaches, as demonstrated by recent Kaspersky research. A phishing simulator test conducted in the Middle East, Turkiye, and Africa region found that 20% of employees would click on malicious links, falling victim to scam emails.

Vovk advises, “Proper access controls for company resources must be implemented within the new entity to ensure data access is limited and revoked appropriately when employees depart.”

Additionally, businesses engaging in M&A activities must familiarize themselves with data protection and cybersecurity laws, including regional regulations governing the responsible processing of personal data.

Vovk concludes, “When acquiring a company, you assume responsibility for its risks. Protecting yourself from new threats by threat actors requires investments in digital business solutions, tools, and skills, compliance with the law, and regular review of cybersecurity policies and protections. Assessing your cybersecurity stance from the outset will reduce the likelihood of incidents, pave the way for development, and help achieve new goals.”

As global M&A trends continue to evolve, businesses in the Middle East and beyond are urged to prioritize cybersecurity as an integral part of their acquisition strategies to ensure long-term success and resilience in an interconnected world.