It remains to be seen whether Yahoo Inc.’s recently-revealed data breaches will nix its sale to Verizon Communications Inc. But whatever happens, M&A lawyers say the Yahoo-Verizon deal illustrates the increasing importance of addressing the risk of a data breach when negotiating an acquisition.
It didn’t’ take long for the $4.8 billion acquisition, announced in July, to get thrown into question. In September, Yahoo confirmed that a 2014 hack impacted at least 500 million customer email accounts. And on Dec. 14, Yahoo admitted that it had suffered yet another breach in 2013, this time affecting more than one billion user accounts, leading to reports that Verizon might be looking to back out of the deal, negotiate a lower price or have Yahoo assume responsibility for lasting damage caused by the hack. Verizon has said it is evaluating the situation and “will review the impact of this new development before reaching any final conclusions,” Bloomberg reported.
