M&A Landscape Shifts: Cybersecurity Indemnities Become Essential Safeguards
Reuters
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Contributed by: Drex DeFord
Summary
In the context of mergers and acquisitions, cybersecurity and data privacy have become major concerns due to the potential impact of cyber threats on transaction value and success. Buyers are increasingly incorporating indemnification provisions into M&A agreements to mitigate risks associated with cybersecurity issues that may arise after closing. These provisions allocate responsibility and provide a mechanism for compensation in case of undisclosed liabilities. It is important for buyers to distinguish between general and specific indemnities, as tailored indemnities targeting specific risks identified during due diligence offer more effective protection against potential cyber threats.
