Market Updates

AI changing M&A landscape

June, 2019

Artificial Intelligence (AI) is influencing every aspect of the global economy, including investment banking. BFSI has witnessed rise in number of merger & acquisitions in last decade. This rise in M&A has developed the need for solution that can reduce the time associated with this activity. One of the preferred solutions is implementation of artificial intelligence that can accelerate the process. M&A areas where AI is being implemented are as follows:

  • Diligence - Data analytics helps in analyzing transaction-level data about the potential target’s cashflows, assets and operations and gains key insights quickly.

  • Negotiations – In negotiation process, analytics provides valuable insights within a quick time thereby allowing your deal team to respond quickly. This quick action and insights help in decide whether to acquire a target or move onto another.

  • Post-merger - Buyers are turning to analytics to help identify potential synergy opportunities, risks and hurdles to prepare for integration and post-deal execution. Once the deal is signed, analytics can help provide insight into areas such as optimizing business activities, tracking synergies, and identifying other potential value creation opportunities between the merged companies

There are vendors in the market providing AI solutions for M&A activities for BFSI and KOGNETICS is one of them. It has developed an AI platform for investment banks that provides industry specify insights and helps in predicting M&A opportunities as well as potential acquirers. Similarly, Deloitte is providing iDeal which is a M&A analytics platform using AI and machine-learning to organize and tag massive amounts of data as part of the workbook creation process

Conclusively, the traditional approach of developing M&A strategy-based data analysis using spreadsheets are now being replaced with more advanced tools that are dynamic and integrated, processes, and techniques that can deliver Bird's-eye view insights as well as minute levels of detail with more precision and less time. Hence, it is expected that in coming years, adoption of artificial intelligence with create new opportunities for M&A activities.

– Rahul,
ICT – Research Analyst,
Infoholic Research