The value of managerial – AI collaboration in mergers and acquisitions

”AI has the potential to revolutionize the M&A process by providing companies with new tools to analyze data and automate routine tasks, thereby reducing the time and effort required to complete the process.”

By Sniazhana Diduc

Mergers and acquisitions (M&A) are important mechanisms for business growth and development. Beyond mere expansion, companies increasingly employ M&A as transformative endeavors. Still, M&A are risky, complex and uncertain processes.

As artificial intelligence (AI) becomes more prevalent in organizations, integration of AI programs and algorithms becomes an emerging need for companies that conduct M&A on the regular basis or for consulting companies that assist these companies in their M&A deals. Hence, it is important to understand what role AI might play in overcoming challenges of M&A processes. In addition, it is important to challenge various myths on “AI taking over the jobs” that escalate and create more confusion and unnecessary complexity.

My recent research explores a grand challenge: How can humans and AI work together? In particular, it explores the domains within M&A processes where AI integration can yield salient advantages.

The process of M&A involves stages such as target screening and selection, due diligence, valuation, negotiation, and integration. These stages require significant time, effort, and resources to complete, making it challenging for firms to successfully execute M&A. AI has the potential to revolutionize the M&A process by proving companies with new tools to analyze data and automate routine tasks, thereby reducing the time and effort required to complete the process. There is a number of AI-based programs that are used in pre-acquisition and post-acquisition phases. In pre-acquisition, AI is used for target screening and selection (e.g., shortlisting potential targets for sell- or buy-side as well as matching buyers and sellers for businesses) as well as in due diligence processes (e.g., services to securely store and process information).

In post-acquisition processes, AI is used in the integration processes to search for the platforms with M&A professions, develop integration solutions and deal pipeline management, as well as in the communication to organize stakeholders in M&A transaction and keep track of communication. There is a number of programs that based on the data collected about the targets, predict the level of complexity in the post-acquisition integration process.    

Still, the data provided by these programs is analyzed by managers. The work in M&A and post-acquisition integrations, in particular, means addressing tensions between establishing strategic interdependency and sustaining organizational autonomy. The ways to address these tensions cannot be simply converted into algorithms. That could raise a puzzle for AI and create a need for managers to collaborate with AI. Still, firms that embrace AI and invest in the necessary infrastructure and technology will be better positioned to successfully execute M&A and achieve their business objectives.

Sniazhko, S. (2019). Uncertainty in decision-making: A review of the international business literature. Cogent Business & Management, 6: 1.

Sniazhko, S. (2021). Uncertainty management of integration managers in MNCs during post-acquisition integration. Acta Wasaensia 466. University of Vaasa

Diduc (Sniazhko), S. (2022). Integration team members’ approaches to uncertainty management in M&A. European Management Journal, 40 (6).

About the author:

Sniazhana Diduc has extensive experience in international business education and industry, teaching courses like International Strategic Management and Cross-Cultural Management. She has run an online retail company in Finland and has consulting experience in market analysis and strategic entry into new markets. Her main focus is on mergers, acquisitions, and managing change. Sniazhana’s research has earned her numerous awards and she is adept at sharing her findings at various levels. She is passionate about collaborating with industry partners, innovating through research, and mentoring students to reach their potential.