Mergers and Acquisitions

Data protection rules govern how personal data is assessed, shared, and transferred during M&A. Organizations should ensure there is an appropriate lawful basis for sharing and transfer, apply safeguards during due diligence, and maintain transparency about how data will be handled. The acquiring entity should also evaluate the compliance history and security posture of the data assets to avoid inheriting issues.

Yes, sharing personal data during due diligence may be permitted if it is necessary to evaluate the transaction and is appropriately safeguarded. Organizations often use anonymized or aggregated data where possible. If personal identifiers are required, privacy can be protected through strict access controls, non-disclosure agreements, and secure data rooms. WatchDog's Secure File Sharing module can support due diligence by providing encrypted, time-limited access with role-based permissions and audit logs for sensitive documents shared with internal stakeholders, external counsel, and advisors.

After a merger, the acquiring entity typically becomes the organization or data controller for the transferred data. It assumes responsibility for protecting the data and meeting applicable obligations. If the new entity intends to use the data for purposes that are materially different from the original context, it should provide updated notices and, where required, obtain additional permissions.

Often, specific consent for the transfer itself is not required when the transfer is necessary to complete the transaction and maintain business continuity, provided there is an appropriate lawful basis and safeguards are applied. Organizations should typically notify individuals about the change in ownership or control and explain how their rights and choices can be exercised going forward.

Schemes of arrangement are court-supervised processes used in some jurisdictions to restructure, merge, or demerge companies. In practice, personal data transfers connected to these transactions are usually handled as part of the broader business reorganization, with a focus on necessity, safeguards, and transparency rather than seeking individual consent from every affected person.

Employee data transfers may be necessary to maintain payroll, benefits, and HR administration during restructuring. Organizations should share only what is needed at each stage, apply strong access controls and encryption, and ensure that internal notices, retention rules, and role-based permissions are updated to reflect the new operating structure.

Ignoring privacy can lead to inheriting data that was collected or used improperly, weak security practices, or unclear permissions and notices. This can create regulatory exposure, litigation risk, operational disruption, and loss of asset value. A structured privacy and security due diligence process helps identify and reduce these risks early.

A privacy or data protection leader helps oversee privacy and security due diligence, advises on safe data sharing during evaluation, and plans integration of governance practices after close. Their input helps structure controls, documentation, and communications to reduce liability and support smooth post-merger operations.