2030:What will M&A look like?

Imagine a world in 2030, where the landscape of mergers and acquisitions (M&A) has undergone profound transformations. As technology continues to evolve at an unprecedented pace, it's inevitable that the M&A industry will be shaped by emerging trends and new ways of conducting business. Let's take a glimpse into the future and explore what M&A might look like in 2030.

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Artificial Intelligence (AI) Revolutionizes M&A strategy

With machine learning algorithms and advanced data analytics based on a company´s strategy, automatic identification of the buyer´s strategic capabilities, financial capabilities and strategic opportunities will precede automatic proposals for spaces to acquire companies[1]. This automatic proposals for spaces to acquire companies will be based on the ERP data of the acquirer, the automatic analysis of adjacent and new markets and their trajectory as well as the evaluation of financial firepower of the acquirer.

Real-time strategy will rise

While strategic planning today is a one-time effort each year in companies, strategic planning will be a continuous process based on a high level of automation.

Artificial Intelligence (AI) Revolutionizes Target Search and selection

Finding potential targets is already automated. New automations are Determining strategic fit and predicting target and acquirer revenue. Strategic fit can be automated using strategic requirements of the acquirer and strategic attributes of the target [1]. Target revenue predictions allows selection of the right target after having checked strategic fit. Acquirer revenue predictions based on the ERP data of the acquirer show how much of the target products can be sold based on the channels and sales organization of the acquirer.

Artificial Intelligence (AI) Disrupts Due Diligence

In 2030, the due diligence process will be revolutionized by the power of AI[2]. With machine learning algorithms and advanced data analytics, AI systems will be able to autonomously perform extensive research and analysis, drastically reducing the time and effort traditionally required. Automated processes will distill results from the data room, from buyer´s data sources as well as external databases to report about synergies, opportunities and risks and will propose how contracts should be shaped and written. In addition, revenue and success predictions as well as prediction of target fit will be possible. This will enable M&A professionals to make more informed decisions and streamline the entire process.

Rise of Virtual, fully automated M&A Marketplaces

In the future, virtual M&A marketplaces will become the norm. These online platforms will connect buyers and sellers globally, breaking down geographical barriers and expanding deal opportunities. By leveraging advanced algorithms and big data analytics, these marketplaces will match potential buyers and sellers more efficiently, creating a thriving ecosystem for M&A activities.

Sustainable M&A Practices Take Center Stage

2030 will witness a significant shift towards sustainable M&A practices. Environmental, social, and governance (ESG) factors will be integral in assessing the long-term viability and value creation potential of target companies. M&A transactions will be guided by the principles of responsible investing, driving positive societal and environmental impacts alongside financial goals.

Cultural Due Diligence Becomes Essential

In the future, cultural compatibility will be a key focus in M&A deals. Understanding and assessing the alignment of values, organizational culture, and leadership styles will be crucial for successful integrations. Advanced tools and methodologies will be developed to evaluate the cultural fit between different entities, minimizing post-M&A integration challenges.

Availability of and access to relevant data increased dramatically

Key information like patent portfolios and supply chain relationships of companies will be available to analyze companies for potential acqusition.

As we step into the future, the M&A landscape will undoubtedly undergo dynamic changes. Embracing technological advancements, prioritizing sustainability, and considering cultural factors will be essential for thriving in the M&A world of 2030. Stay prepared, be adaptable, and remember, the future holds infinite possibilities for the M&A industry.

Sources

[1] Karl Michael Popp, Automation of mergers and acquisitions: M&A strategy Definition: Theory, Tasks and Automatability, BOD, 2023.

[2] Karl Michael Popp, Automation of mergers and Acquisitions: Due Diligence Tasks and Automation, BOD, 2020.

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