As businesses continue to create huge amounts of data, accessing, retrieving and analyzing that information is becoming ever more critical to identifying new revenue streams and products, as well as streamlining and optimizing operations. As a result, more businesses continue to invest in digital transformation and the technologies that power them, including artificial intelligence (AI).
AI has emerged as a transformative power across various industries, including mergers and acquisitions (M&A).
With its ability to manage large datasets, intricate decision-making processes, and ensure efficiency and precision, AI has quickly become an indispensable tool for streamlining M&A procedures, enhancing due diligence, automating manual tasks, expediting data analysis for increased value and accelerated integration, and improving overall deal outcomes.
Dealmakers must factor in a wide range of geopolitical, regulatory and financial risks into their dealmaking, and they are required to manage information and data of multiple stakeholders in high pressure, time sensitive environments. AI can help dealmakers manage some of these inherent risks and due diligence is a key area that is already being transformed by the technology.
AI Streamlining Due Diligence Times
Due diligence is resource-intensive and traditionally relies upon the manual processing of information and documents. When faced with tight deadlines and time constraints, the standard of work delivered can be compromised. AI can assist dealmakers facing this challenge by helping them quickly sort and summarize content. By surfacing core clauses and notable relevant obligations to those involved in the deal, it rapidly reduces the time involved in the processing of documents. For instance, AI can streamline the organization and categorization of files needed for review during due diligence, reducing human error and ensuring compliance with regulatory requirements. At its core, AI is a strategic enabler – helping to provide insights and greater efficiency in due diligence. Yet, while AI can provide the critical information required, the parameters required for the algorithm to work well, require human input. The information extracted by the AI still needs to be analyzed by a professional, demonstrating the need for high-end legal and business decision making.
AI can also help identify potential M&A targets for buyers, by triangulating different market signals such as company description, geographic fit, and size criteria. By using private, public and paid data, some AI-powered applications are already helping dealmakers identify deal targets faster.
Those pursuing a programmatic M&A strategy of acquisitions of multiple smaller companies over larger, one-off deals, stand to greatly benefit from this approach. This approach can also mean that companies are in a better position to integrate new capabilities when the deal is completed to deliver the consistent growth that was intended by the tie-up.
Valuation and Analysis AI Use Case
Additionally, AI can aid in the valuation process by providing objective analyses based on historical data and market factors. By automating repetitive and time-consuming tasks, such as redacting, AI can also enable dealmakers to focus on strategic-level decisions and creative thinking.
Dealmakers want to use AI tools in the M&A process. In fact, two-thirds of global dealmakers said exploring the use of new AI tools is their top area of operational focus next year, and most see increased productivity as a primary benefit of AI in their business, speeding up deals by as much as 50%. Yet there are some gaps that need to be bridged between AI knowledge and its application.
A significant amount of dealmakers say data security and privacy concerns are the biggest obstacles to incorporating AI into their businesses and a majority want the technology regulated.
Still, the benefits of using AI in M&A are clear, and dealmakers are taking note. Three in five global dealmakers said exploring the use of new AI tools is their top area of operational focus in 2025.
Yet, if AI is here to stay, dealmakers need to use it with tact. Maintaining an optimal balance between AI-driven automation and human expertise is essential to maximizing productivity and securing successful M&A transactions.
