How can artificial intelligence impact the evaluation phase of a company takeover? Contribution of an in-depth case

Abstract

Purpose AI has a leading influence and impact on organizations’ strategies. Yet few studies address how AI tools can impact M&A negotiation and the takeover evaluation stages of firms. Through an in-depth case study, our work questions how such tools can help with key stages of screening and due diligence periods. Design/methodology/approach We conduct several interviews with founders of the acquiring firm (Group Impact), and we had access to a large amount of information on the launch of the takeover process (including the data room of negotiation documents). Findings We detail the phases in which AI saved time (nongenerative AI) and, with a view to the future, we detail how a generative version of AI could help in the due diligence and negotiation phases. Also, we address the sticking points that prevented the takeover from being finalized. Originality/value First, few studies address the negotiation stage of takeovers as part of these are not finalized and, for the others, researchers are present in the field when the operation is signed. Second, studies that address takeovers that have failed are rare, yet understanding the blocking factors are essential to continue a long-term external growth strategy.