Mergers and acquisitions in the technology sector are picking up as revenue operations solutions lead the charge toward consolidation. These combinations promise enhanced capabilities and unified solutions, but they also create a hidden and significant risk: dramatically increased cybersecurity vulnerabilities that can expose your organization's most sensitive data.
Recent high-profile incidents have demonstrated how M&A activities can create perfect storm conditions for security breaches. The rush to integrate systems, organizational disruptions, and the complexity of merging different security architectures create opportunities that threat actors are increasingly exploiting. For organizations relying on these vendors, understanding and mitigating these risks has become essential.
The Research: M&A Creates Measurable Security Risks
The data on M&A-related cybersecurity risks is both comprehensive and concerning. IBM's Institute for Business Value conducted the most extensive study to date, surveying 720 executives responsible for merger and acquisition functions across multiple industries. Their findings reveal a stark reality: 53% of organizations experience critical cybersecurity issues during M&A deals that actually put transactions in jeopardy.
Companies face 35% higher breach rates during integration periods compared to normal operations. This elevated risk persists throughout the integration process, which can extend 18-24 months post-acquisition.
The research identifies several contributing factors to this increased vulnerability:
- Phishing attempts against newly merged organizations increase by 400% following M&A announcements, as attackers see the organizational chaos as an opportunity.
- The median time to detect breaches extends from 204 days during normal operations to 267 days during integration periods, a 31% increase that gives attackers significantly more time to establish persistence and extract valuable data.
Additional studies from UC Berkeley's Center for Long-Term Cybersecurity and Willis Towers Watson confirm these patterns across industries. Manufacturing and technology sectors face particularly acute risks, with manufacturing accounting for 42% of all M&A-related cybersecurity incidents despite representing a smaller portion of overall M&A activity.
Why M&A Creates Security Vulnerabilities
The mechanisms behind increased M&A security risk are well-documented. Integration complexity tops the list: merging different security architectures creates gaps, data migration introduces exposure points, and legacy systems often remain unmonitored during transitions. The human factor compounds these technical challenges through cultural integration difficulties, training gaps, and "privilege creep" as temporary elevated permissions become permanent.
Visibility gaps emerge as organizations struggle to monitor disparate systems during integration. The average organization uses 50+ security tools that become even more fragmented during M&A, while new cloud services spin up at rates of 300+ monthly during integration phases.
Five Essential Questions for Vendor Security During M&A
Given these documented risks, organizations must take proactive steps when their vendors undergo mergers or acquisitions. Here are five critical questions that can help protect your data and operations:
1. What is your timeline and methodology for integrating security systems?
Understanding your vendor's security integration approach is fundamental. Look for detailed, phase-by-phase plans that include specific security milestones and checkpoints.
Listen for: maintaining separate security perimeters during initial phases, conducting security architecture reviews before system integration, and implementing enhanced monitoring during transition periods.
Vendors who plan rushed integrations or lack detailed security roadmaps present significant risks. The research shows that organizations maintaining dedicated integration security teams and following structured methodologies experience significantly fewer incidents.
2. How are you managing authentication systems, API access, and third-party integrations during the merger?
This question addresses one of the most vulnerable aspects of M&A integrations. OAuth tokens, API keys, and third-party connections often persist across organizational boundaries during mergers, creating potential attack vectors. These authentication mechanisms can become orphaned during integration, remaining active without proper oversight.
Listen for: vendors who have comprehensive inventories of all authentication tokens and third-party integrations, established token rotation schedules during integration, and clear processes for reviewing and updating API access controls. The best responses will include specific timelines for credential rotation and detailed integration security reviews.
3. What cybersecurity personnel and expertise are you retaining versus restructuring?
The human element represents a critical vulnerability during M&A activities. Organizations often eliminate redundant positions without considering the loss of institutional security knowledge. Ask about security team continuity plans, knowledge transfer procedures, and how they're addressing potential expertise gaps.
Listen for: retention plans for key security personnel, documented knowledge transfer processes, and identified external security expertise to fill any temporary gaps. Immediate elimination of acquired company security staff or lack of clear security leadership during integration represents significant risk.
4. How are you maintaining threat detection and incident response capabilities across newly combined systems?
With breach detection times increasing 31% during M&A periods, understanding your vendor's monitoring and response capabilities becomes crucial. Ask about unified monitoring implementations, incident response procedures spanning both organizations, and dedicated security operations during integration.
Listen for: vendors maintaining or enhancing their security operations centers, implementing cross-organizational monitoring capabilities, and establishing clear incident response procedures that account for the complexity of merged systems.
5. What is your track record and process for security due diligence on acquired companies?
This question reveals your vendor's overall approach to M&A security. Many organizations wait until due diligence completion to perform cybersecurity assessments, a timeline that's often too late to identify critical vulnerabilities.
Listen for: vendors who conduct security assessments early in the M&A process, have documented methodologies for evaluating acquired company security postures, and maintain clear processes for remediating inherited vulnerabilities. They should be able to discuss their general approach to handling security gaps without disclosing specific details about particular acquisitions.
Taking Action
The consolidation wave in technology shows no signs of slowing, making these questions increasingly relevant for organizations across all sectors. By asking these targeted questions and carefully evaluating responses, you can better assess whether your vendors are taking appropriate steps to maintain security during their growth phases.
Your vendor's security posture during M&A directly impacts your organization's risk profile. Taking a proactive approach to vendor security assessment during these critical periods protects your business in an increasingly consolidated and complex technology landscape.
Referenced Research
- IBM Institute for Business Value - "Assessing Cyber Risk in M&A": https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/cyber-risk-mergers-acquisitions
- UC Berkeley Center for Long-Term Cybersecurity - "Moving Left and Right: Cybersecurity Processes and Outcomes in M&A Due Diligence": https://cltc.berkeley.edu/moving-left-and-right/
- Willis Towers Watson - "Cybersecurity considerations in Merger and Acquisitions transactions: An in-depth analysis": https://www.wtwco.com/en-us/insights/2024/08/cybersecurity-considerations-in-merger-and-acquisitions-transactions-an-in-depth-analysis
- NASDAQ - “Why Cybersecurity Has a Critical Role in M&A Due Diligence”: https://www.nasdaq.com/articles/why-cybersecurity-has-a-critical-role-in-ma-due-diligence