Legal issues relating to M&A in the information security industry

In the past, users paid insufficient attention to information security, leading to the slow development of the industry. In recent years, on the one hand, policy support for the information security industry by the Ministry of Industry and Information Technology and the National Development and Reform Commission has been increasing. On the other hand, the development of the information application field has been broadening and deepening, thereby increasing the demand for information security.

The Snowden incident this year has given an increased push to the development of the information security industry. For those information security enterprises that wish to expand, or wish to improve their product lines, acquisitions or restructurings may be their best options.

In 2012, this firm assisted Venustech in completing its acquisition of LeadSec. The authors would like to share with readers the legal issues in M&A in the information security industry that are worth attention, based on our experience in that project.

For M&A and restructurings in the information security industry, in addition to general legal compliance issues, there are also some special points that are intimately connected with factors such as limitations on access by foreign investors, product and business qualifications, research and development (R&D) and business teams, intellectual property, etc.

Yuan Dongmei is a partner and Lucia Young is a paralegal at Concord & Partners