• videocam Live Webinar with Live Q&A
  • calendar_month January 26, 2027 @ 1:00 PM ET/10:00 AM PT
  • signal_cellular_alt Intermediate
  • card_travel Mergers and Acquisitions
  • schedule 90 minutes

Data, Cybersecurity, and AI Risk Allocation in M&A Transactions: Moving Beyond Standard Diligence

Surfacing Exposures; Risk Allocation Mechanisms Including Reps, Indemnities, and Insurance; Post-Closing Systems Integration

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About the Course

Introduction

This CLE course will guide deal attorneys in managing and allocating data privacy and cybersecurity risks in M&A transactions. The panel will discuss best practices for identifying and addressing data privacy and cybersecurity concerns throughout the life of a deal.

Description

Data security breaches are at an all-time high, and the data privacy legal landscape is changing rapidly with new and expanded data protection laws nationally and internationally. At the same time, data is often among the most valuable assets of a target company. For these reasons, data privacy and cybersecurity planning in M&A transactions is more crucial than ever.

Counsel for buyers should evaluate and prioritize data privacy and cybersecurity risks throughout the deal lifecycle, from assessing a potential target to drafting the contract and closing the deal. Examining a target's data assets and identifying privacy and cybersecurity vulnerabilities are essential to identifying showstoppers and executing a deal, including implementing risk mitigation measures and planning for successful post-acquisition data integration.

AI tools used during deals and targets' ordinary business operations affect deal execution, data privacy, cybersecurity, and due diligence. Acquirers inherit targets' prior AI practices, shadow AI, and employee prompts. Three data privacy and cybersecurity risks often missed in standard diligence are: data exposure when employees enter contracts, IP, or customer data into third-party platforms; vulnerabilities in products built with inadequately secured or reviewed AI components; and inherited regulatory exposure (HIPAA, FTC, SOC 2, or state law violations) that remain actionable after closing. Updating diligence to identify these AI risks can prevent costly post-closing corrections. Our faculty will discuss prevalent AI risks and how to address them in M&A diligence and deal documents.

In addition, when negotiating and drafting the transaction documents, counsel for both parties should ensure that any data transfer or sharing in connection with the transaction is compliant with privacy laws and that the relevant reps and warranties provisions and related indemnities or other recourse are tailored to the target's data privacy and cybersecurity risks.

Listen as our authoritative panel examines critical considerations for managing and allocating data privacy and cybersecurity risks in M&A deals.

Presented By

Melissa Faragasso
Attorney
Cleary Gottlieb Steen & Hamilton LLP

Ms. Faragasso’s practice focuses on cybersecurity, data protection, and privacy, and commercial transactions involving technology and data. She regularly advises on complex data processing, transfer and licensing projects, collaborations and services arrangements. Ms. Faragasso also provides extensive advice on data privacy and cybersecurity compliance matters, as well as emerging technologies and related regulation, including with respect to artificial intelligence and data sharing.


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Daniel Ilan
Partner and Leader of Global Intellectual Property, Technology and Data Group
Cleary Gottlieb Steen & Hamilton LLP

Mr. Ilan’s practice focuses on intellectual property law, cybersecurity, and privacy, as well as artificial intelligence. He has significant experience in representing leading multinational corporations and private equity firms in IP, technology, AI, cybersecurity, and privacy issues arising in transactional contexts, particularly transactions involving licensing or acquisition of, or investment in, IP, data, and various technologies. Mr. Ilan is a member of the board of directors of Volunteer Lawyers for the Arts, a preeminent legal aid organization providing pro bono legal representation to artists, fashion designers, and nonprofit arts and cultural organizations.

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Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

Date + Time

  • event

    Tuesday, January 26, 2027

  • schedule

    1:00 PM ET/10:00 AM PT

I. Key issues to look for in the diligence process, taking into account the risks associated with the target

II. AI diligence: surfacing shadow AI, employee prompts, data exposure, insecure components, and inherited reg risks before closing

III. Transaction-related data transfers

IV. Allocating data privacy and cybersecurity risks in drafting and negotiating transaction documents

A. Reps and warranties

B. Indemnity provisions

C. Insurance

D. Other contractual measures

V. Risks associated with post-closing integration of data and systems.

The panel will review these and other key issues:

  • What should counsel request from the target company to identify potential data privacy and cybersecurity vulnerabilities early in a transaction?
  • How should counsel assess shadow AI, employee prompts, data exposure, insecure AI components, and inherited regulatory risks in due diligence?
  • In what ways can parties adapt transaction documents to mitigate the impact of AI-related exposure?
  • How can transaction documents allocate risk through reps and warranties and indemnity provisions or other risk mitigation terms?
  • How should transaction-related data transfers (whether pre-signing, pre-closing, or post-closing) be tailored to comply with privacy laws?