A report from Bain and Company has revealed that 21 per cent of M&A practitioners currently use GenAI in M&A processes – up from 16 per cent in 2023 – and more than half expect to integrate this technology into their dealmaking by 2027. There are a wide range of activities where AI solutions can be applied in M&A, including sourcing, screening, and diligence.
According to PwC, the volume of deals over USD1 billion increased by 17 per cent in 2024, with this set to rise further in 2025. To keep up with the acceleration in activity, investment banks will need to lean even more heavily on AI.
According to Victor Basta, Managing Partner at Artis Partners, the sell-side M&A and growth financing specialists for technology companies, both buyers and sellers looking to capitalise on increased dealmaking activity should explore AI implementation to maximise potential margins.
Basta says: “It’s critical that dealmakers research and adopt emerging technologies, as failure to do so could result in firms falling behind competitors. However, a certain level of restraint is important, with the scope of work GenAI innovations are capable of handling far from exhaustive.
“M&A can’t be fully automated, as putting deals together is not the same as selling a financial product. There is too much money on the line, too much ‘choreography’ required and too much risk involved to put significant parts of any deal process in the hands of AI.
“Where AI can find its niche is in relieving the burden of administrative work, with a prime use case of GenAI in M&A supporting the creation of pitches and presentations. Junior staff often work tirelessly putting together slides across presentations, including formatting and fact-checking, much of which can now be standardised by AI.
“The due diligence process can also be accelerated with assistance from GenAI, automating laborious procedures such as document iteration and the adjustment of a variety of files so they conform to each other.
“Strategic M&A is still very much a human endeavour, and often a once-in-a-lifetime event even for seasoned CEOs. Establishing strong relationships with potential targets remains essential, and this isn’t an area where GenAI can lead in any meaningful way. Blending human experience with GenAI will support individuals on both sides of the negotiating table in achieving acquisitions that maximise profitability.”
Basta concludes: “The M&A market is on a rebound, and people are primed to do deals. With the money flowing into special-purpose AI tools, the technology to automate the most laborious – and often least value-add parts of the process – is now becoming readily available. M&A firms must use AI to their advantage to complete deals faster, leveraging it as a tool to increase efficiency.”
