How AI Is Changing Operational Diligence in M&A Deals

With artificial intelligence accessible to every party in a transaction, the competitive edge in mergers and acquisitions no longer comes from the technology. The M&A edge goes to experienced professionals who can direct AI effectively in respect to diligence, integration, and post-close execution, write executives from Ankura Consulting Group in a recent article.

Historically, due diligence relied on teams reviewing using judgment and experience to guess where problems hid in data. In transactions involving large data sets or multiple prior acquisitions, teams could only sample a portion of available information.

The most consequential risks, often found in connections between operations, contracts, and systems, were the ones most likely to be missed.

Rather than sampling data, AI enables a complete review of every document. Practitioners then determine which findings matter and verify accuracy against original sources.

The article argues that because AI is now equally available to all dealmakers, differentiation depends on how skillfully professionals apply their own expertise on top of the technology.

The AI process supports resilient diligence that anticipates unusual deal structures, and better coordination between financial, legal, and tax advisors. The article stresses that diligence insights should feed directly into integration planning and into identifying entanglements that complicate separations.

Value is only realized once integration execution begins, a phase AI can help manage by coordinating tasks across functional teams.

Deal structuring should account for AI-identified entanglements early, particularly in carve-out transactions where transition service agreements and stranded costs can erode deal value.

Integration risk should be addressed proactively, since counsel may need to review AI-generated task plans for compliance and contractual accuracy.

Given coordination across multiple advisory teams, counsel should also consider how outside spend and legal operations are managed when AI tools centralize diligence across workstreams.