Mergers and acquisitions in the US topped 12,000 last year and 2016 is already heating up, with a shareholder vote on Marriott International’s bid for Starwood Hotels expected this week, in a move that would create the world’s largest hotel chain. Experts say that in any M&A transaction, cyber risk must become a key focus in the due diligence process, but particularly in the hospitality industry.
Cyber criminals targeted at least five hotel chains in 2015 – Hilton, White Lodging Services, Starwood, Mandarin Oriental, and the Trump Collection. Recent reports also indicate that the Trump hotel chain has again been hacked. Hotel chains appeal to hackers as a steady business usually transacted with credit and debit cards and a high-volume blend of business and leisure travelers. Hotels mergers and acquisitions have increased as chains seek to consolidate and compete, but the security industry warns that acquiring companies need to be aware of the risks that come with the purchase.
Steven Grossman, vice president of program management at Bay Dynamics, told Advisen, “Fundamentally, the biggest issue is treating cyber risk as a major risk that can affect the value of the acquisition. If you’re acquiring a company that has a weak cyber posture … that’s going to reduce the value of the company. If there’s a breach post-acquisition, it’s going to affect the company at large.”
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Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].
