The new era of M&A: Bridging transactions and transformation with AI
As our latest EY-Parthenon CEO Outlook says: 'Disruption never sleeps—and neither does the need to transform and create value.' In that context, making strategic choices is becoming far more difficult than ever before.
Take AI: a huge opportunity—but also a significant challenge. Although AI has been part of the toolkit for some time, generative AI opens up a new world of possibilities for businesses across all sectors.
One such opportunity is how AI can transform the mergers and acquisitions (M&A) landscape. It is bringing unprecedented speed, accuracy, and strategic insights to every aspect of the transaction lifecycle. Deals can be supercharged with new capabilities, giving M&A teams the potential to unlock significantly more value.
As AI continues to evolve, there will be three essential levers for AI-enabled M&A:
1. FASTER IDENTIFICATION OF INVESTMENT OPPORTUNITIES THAT ARE TAILORED TO THE INVESTMENT THESIS
With advancements in AI, large language models (LLMs) and specialized language models are enabling companies to quickly scan large amounts of structured and unstructured data to identify potential acquisition targets aligned with their strategic goals. AI agents powered by the LLMs can now analyze financial health, growth patterns, competitive positioning, and even cultural compatibility with remarkable accuracy.
For example, EY Competitive Edge is the proprietary platform used by EY-Parthenon to leverage the latest LLMs from Microsoft. It enables clients to screen for assets at pace, along with deep insights on competitive positioning to aid investment thesis and decision-making for M&A teams.
EY-Parthenon helped a leading life science company create its strategy, which enabled it to innovate its business model and enter a new market in the chronic care segment. The platform's deep sector data brought in relevant insights on the landscape of companies within the category, competitor activities, and potential buy-versus-partnership opportunities to execute their growth ambitions. The team used its extensive sector experience to provide valuable recommendations that informed the company's strategic planning.
2. DEEP DUE DILIGENCE, FASTER AND MORE FOCUSED
AI is transforming due diligence by enabling teams to dive deeper into analysis and extract more value from data. With AI-powered tools that analyze financials, flag risks, and identify synergies or redundancies, teams can uncover insights with greater precision. This shift allows teams to move beyond routine tasks and focus on providing high-value insights that drive better decision-making.
Proprietary solutions like Diligence Edge enable us to see the forest for the trees. EY-Parthenon, which handles thousands of diligence deals each year, is already on the change management journey, with teams actively using its proprietary solutions on deals today. Featuring tools such as the Digital Diligence Assistant, the latest AI-enabled platform, embedded with EY Parthenon's deep diligence expertise, accelerates data analysis, empowering teams to deliver richer, data-driven insights that uncover deeper value.
3. BRIDGING TRANSACTION EXECUTION TO TRANSFORMATION
Traditionally, M&A has been viewed as a two-step process: transaction, then transformation. But AI is bridging this gap, offering a continuous thread that connects transaction objectives with transformative post-deal value. It allows teams to have a more nuanced view of the synergies beyond traditional cost-cutting. AI-powered insights can highlight revenue growth opportunities, by identifying complementary capabilities and customer bases.
EY Capital Edge is another tool that helps accelerate delivery and value realization by using more than 30 purpose-built apps in an integrated platform to streamline transaction and transformation execution. This AI-driven platform gives EY-Parthenon teams advising clients access to the latest leading practices, methodologies, and engagement accelerators to drive global collaboration. This brings significant value to clients to help organize the process and accelerate the deal process.
THE OPPORTUNITY: LEVERAGING AI FOR SUSTAINABLE COMPETITIVE ADVANTAGE
As AI continues to evolve, its role in M&A will only deepen. The companies that gain most will be those that view AI not as a mere efficiency tool, but as a strategic enabler for long-term value creation. Leveraging AI to streamline transactions while setting the stage for transformative growth offers companies a sustainable competitive advantage in a world where agility and adaptability are key.
For dealmakers, this means a mindset shift: the ability to recognize AI as a bridge that seamlessly connects the transactional rigor of M&A with the strategic foresight needed for transformation. This holistic approach, where AI is embedded across all aspects of the M&A lifecycle, will be the differentiator in creating lasting value in an increasingly competitive landscape.
In the near future, we can expect M&A processes powered by AI to be faster, smarter, and more strategically aligned than ever before. The companies that embrace this technology today are not just setting themselves up for successful transactions—they are laying the groundwork for sustained growth and innovation, and transforming the way we think about mergers and acquisitions in a digital-first world.
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