Personal information about consumers is the lifeblood of many organizations. In the era of big data and increasingly advanced data analytics, companies can use personal information more effectively to target existing and prospective consumers and gain advantages over competitors. Because of the potential value of the information, companies are increasingly focused on privacy and data security issues that arise in the context of mergers, acquisitions, divestitures and related transactions. In many corporate transactions, data is a critical asset that should be addressed as a key deal point. Just as the financial condition of a target company should be carefully analyzed, so too should a company’s data protection practices. Unfortunately, too often personal data is transferred without consideration of issues that otherwise might change the pricing of a deal–or kill it altogether.

This article describes the privacy and data security-related legal issues that arise in corporate transactions, and provides a how-to guide on addressing those issues during the various stages of a transaction. Starting with the due diligence process when initially contemplating a merger or acquisition, companies should conduct a thorough investigation to understand the data protection posture of the target entity. The findings from the inquiry will inform the relevant contract provisions in the deal documents. As a general rule, the more unknowns there are when it comes to privacy and data security, the more carefully crafted the deal documents must be to protect the acquiring company against potential pitfalls. If possible, the parties should cooperate to remediate significant issues before closing. If this is not feasible, the acquiring entity should be prepared to quickly address post-closing any significant privacy and data security compliance issues that remain.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]