The impact of AI on M&A strategies

Business use of AI in the CEE region is growing significantly and will gradually become ubiquitous. Alongside digitisation and automation, its impact on corporate M&A strategies has been transformative, reshaping how transactions are conducted - from initial research and due diligence to post-merger integration. This is helping to increase the efficiency, speed and accuracy of the M&A process, reducing costs and minimising risks. AI is ultimately poised to revolutionise deal-making by enhancing transparency and reducing uncertainty.

“We are seeing a significant shift in general towards the use of AI in business, particularly to increase efficiency and simplify processes,” says Rodica Manea, Partner at CMS in Romania. “We have also found that there is an increased interest from clients in integrating technology-based solutions into their M&A projects.”

Eva Talmacsi, Partner at CMS in the UK & CEE, adds: “Beyond efficiency, AI is influencing valuation methodologies. Predictive analytics, powered by AI, can identify risks and opportunities earlier in the process, allowing for more informed decision-making. Furthermore, AI-driven negotiation platforms can potentially reshape how deals are structured, managed and executed, making the process more collaborative and efficient.”

In the CEE region’s largest economy, Partner at CMS in Poland, Ryszard Manteuffel notes: "Poland has many excellent IT companies dealing with the enormous changes brought in by the AI revolution. We have a lot of tech companies which are very strong in this sector and able to deliver the AI solutions that companies need in order to compete.” The Polish government recently unveiled an investment plan to position Poland as a European leader in AI innovation.

According to Martina Gavalec, Partner at CMS in Slovakia, “We see a clear transformation in how AI is being used, evolving from a supplementary tool to a strategic asset in deal making. Companies are using AI from the earliest stages of the M&A process, deploying advanced algorithms to identify acquisition targets through market, customer and competitor analysis. AI tools boost target research efficiency by applying predictive analytics to forecast growth and align strategy goals with industry trends.”

AI companies represent highly attractive acquisition opportunities because of their potential for scalable innovation and long-term value creation, notes Martina Gavalec. “They represent compelling acquisition opportunities due to their potential to drive innovation and competitive advantage,” says Eva Talmacsi. “They enable buyers to tap into emerging technologies, such as machine learning, natural language processing, and generative AI, to create new products or optimise existing operations.”

Elmer Veenman, Partner in the Netherlands, notes: “Financial advisors are using AI tools for deal sourcing. Analysts used to search the internet, trying to find suitable targets. But that is completely changing: AI tools can now effectively tell you what targets may be of interest. At the same time, this applies throughout the M&A process with AI and generative AI (Gen AI) as supporting tools.” 

AI tools have been transforming M&A for more than a decade - initially automating data extraction and document review, and then advanced tools like natural language processing and machine learning began enhancing the origination, due diligence and post-merger integration.

Today, AI-driven tools are also simplifying and accelerating the due diligence process: quickly analysing large amounts of data, identifying risks, highlighting anomalies, flagging critical patterns in financial data, analysing contracts to uncover hidden liabilities, and automating repetitive tasks such as document categorisation. The net result is that less time is needed to complete due diligence, so accuracy improves by the elimination of manual errors, and decision makers can focus on strategic analysis rather than administrative tasks.

Irene Ng Šega, Senior Attorney at CMS in Austria, notes the importance in legal upskilling for lawyers to use AI tools effectively. “For firms looking to implement AI tools in their workstreams, getting the most value and return from such tools can improve transaction efficiency,” she says. “Investment into legal upskilling, e.g. teaching lawyers skills such as prompt engineering for GenAI tools, can help them harness and maximise the potential of AI tools. This is especially useful when lawyers are working under tight deadlines in a time-sensitive transaction.”

Notably, AI is driving demand for data centres in the CEE region as companies increasingly rely on data-intensive AI applications. This is prompting investments in larger, more energy-efficient facilities capable of handling high-performance computing (HPC) workloads. AI-driven predictive maintenance and operational optimisation are also enhancing data centre efficiency, reducing costs, and improving sustainability. 

CEE’s strategic location, low operating costs, and abundant renewable energy resources make it an attractive destination for global players establishing AI-ready data centres. Partnerships between telecom companies and AI firms are also emerging as they work to meet the region’s growing data processing needs.

“Data centres are using AI solutions at an advanced level, so when someone wants to build a data centre, or just buy one, AI due diligence is particularly important,” says Katalin Horváth, Partner at CMS in Hungary. “AI needs a huge amount of energy, and ironically, AI data centres can control energy consumption with AI, just as AI workloads significantly impact their energy consumption,” she says. “ESG is increasingly important in acquiring data centres: efficiency and sustainability strategies are therefore essential - something which must be checked carefully during the due diligence process.”

Overall, AI is transforming the M&A process by improving efficiency, accuracy and speed. Entrepreneurs and dealmakers benefit from faster due diligence through AI-based tools, improved security and collaboration, more accurate assessments through predictive analytics, and enhanced post-merger integration through project management tools and data integration platforms.

“Digitising and automating the M&A process enables companies to reduce risk, identify better deals and streamline operations” says Rodica Manea. “By adopting technologies such as AI, entrepreneurs can significantly improve the odds of a deal succeeding and maximise the value realised from their M&A transactions.”