Li Kunyang: How AI technology can give rise to a new paradigm in mergers and acquisitions

Written by

Iris Vance

Updated on:June-13th-2025

With the rapid development of AI technology, all walks of life actively integrating with AI has become the main feature of the current era. As a low-frequency and significant economic activity, it is also a general trend for M&A business to be equipped with the wings of AI . Under the background of policy support and industrial upgrading, the inherent demand for corporate mergers and acquisitions has been released, and all parties gathered in the tide of mergers and acquisitions will also be delighted to find that AI will shape the M&A business for a longer time and in a deeper level.

Li Kunyang, general manager of Yiguanghe Information Technology (Beijing) Co., Ltd. , wrote in Peking University Financial Review that the impact of AI is not only reflected in how it helps M&A transactions themselves, but also in its deep impact on corporate development strategies. AI can play a role in M&A transactions (the path to achieving M&A strategies), and can simultaneously process a large amount of information to help transactions more easily approach the global optimal solution.

With the rapid development of AI technology, all walks of life actively integrating with AI has become the main feature of the current era. As a low-frequency and significant economic activity, it is also a general trend for M&A business to be equipped with the wings of AI. Under the background of policy support and industrial upgrading, the inherent demand for corporate mergers and acquisitions has been released, and all parties gathered in the tide of mergers and acquisitions will also be delighted to find that AI will shape the M&A business for a longer time and in a deeper level.

Two dimensions in M&A transaction practice

In the practice of industrial mergers and acquisitions transactions, an M&A project can be understood from two dimensions: one is the role dimension, and the other is the time dimension.

From the perspective of roles, a typical M&A transaction often includes the following key roles: buyer, seller, buyer shareholders and decision-makers, seller shareholders and decision-makers, various service agencies and relevant regulatory authorities. From the perspective of time, a typical M&A transaction can be divided into several links, including: formulation of M&A strategy, screening of both parties, due diligence, negotiation and conclusion of transaction plan, decision-making and regulatory approval, execution of M&A transaction, post-M&A integration and realization of M&A strategic goals. M&A strategy is a complex corporate-level strategy that integrates industrial development strategy and capital market strategy. Generally speaking, all parties in M&A transactions must have the pattern and ability to base themselves on industrial strategy and plan capital strategy.

AI creates greater value for all parties in M&A transactions

The impact of AI is not only reflected in how it assists M&A transactions themselves, but also in its deep-seated impact on corporate development strategies. The aforementioned parties, especially shareholders and decision-makers on both sides of the transaction, have begun to skillfully use AI tools to obtain information more quickly and comprehensively, making the formation of strategic goals more accurate and the comparison and selection of implementation paths more efficient. Especially for industrial acquirers, it is necessary to think about and formulate industrial development strategies in the AI era, and carefully plan how potential M&A transactions will serve the above strategies. The greatest value that M&A transactions can bring is the realization of strategic goals, which is also the ceiling for transaction value creation.

AI can certainly play a role in M&A transactions (the path to achieving M&A strategies). AI helps all people involved in M&A upgrade their work modes, and the value of people themselves becomes more prominent. Once the M&A strategy becomes clear, "how to find the right deal" becomes urgent, which is a question of path. As the saying goes, beauty is in the eye of the beholder. In addition to the absolute one in a hundred, there is also the beauty in the eyes of the beholder. The buyer in M&A must find the dream lover; in M&A, who doesn't want to find the best destination? It would be great if there was a global perspective: a large enough search range, complete and true information that can be used for decision-making, and find the global optimal solution. But it is accompanied by a geometric increase in the amount of information and workload. AI naturally has such an advantage, and can process a large amount of information simultaneously, helping transactions to more easily approach the global optimal solution. The staffing and work modes that have been used since the last century will be replaced, and it will be possible to achieve a curve overtaking in the link of creating transactions.

Although potential trading opportunities are created by AI, the role and value of people themselves are still irreplaceable. The excellent M&A transaction we expect is likely to benefit all parties and achieve the Pareto optimal effect. The more realistic situation is that multiple goals are often difficult to balance, and each seems to have its own advantages and disadvantages; the analysis and judgment of the future, short-term, medium-term and long-term considerations are by no means entirely based on numbers and models. These are more dependent on the subjective assumptions, trade-offs and judgments of the decision-makers on both sides. How to make decisions, determine priorities and play games is obviously not entirely determined by AI.

AI helps better manage information asymmetry

M&A transactions are complex and full of variables, which is closely related to the information asymmetry problem in the M&A transaction process. Information asymmetry is a persistent and common phenomenon, which often brings great communication costs and uncertainty.

Use AI technology to manage information asymmetry instead of trying to eliminate it. This is because information asymmetry is necessary and is a natural feature of M&A business. First of all, the parties involved in the M&A transaction have the need to keep confidentiality. If the acquirer is a listed company, there are requirements for insider information management and information disclosure. Insider information has already been formed during the proposal and planning stages of relevant matters. The regulatory authorities require listed companies to do a good job in keeping insider information confidential, strictly implement the registration and management system for insiders of insider information, and consolidate the main responsibility of listed companies to prevent and control insider trading. At the same time, relevant intermediary service agencies must strictly implement confidentiality regulations, which is also an important manifestation of their professionalism and compliance. The target party often has strong self-protection considerations. M&A rumors spread widely in the market, which may cause instability in the team, customers, business, etc., and even be exploited by competitors. Sometimes, for some special considerations, the acquirer even has to hide his identity. This type of indirect M&A transaction often occurs in cross-border M&A and M&A in the same industry. If a well-known and powerful enterprise directly contacts the target company, the target company may raise the price arbitrarily, which will lead to inflated prices and make the transaction impossible.

In summary, it is necessary to effectively reach the appropriate M&A counterparty, pass the necessary information and requirements to the other party's decision-making level, and control the scope and rhythm of information dissemination. This is exactly the link that AI can empower. Therefore, AI technology can serve M&A transactions, starting with refined project information management, throughout the entire M&A transaction process.

AI helps better control costs and reduce risks

It is not easy to reach an M&A transaction. Behind the word "not easy" are costs and risks. The opportunity cost and sunk cost brought by low conversion rate are difficult to measure. Especially for intermediary service institutions such as investment banks, they will definitely invest a lot of energy in the matchmaking process. The higher efficiency of AI can greatly dilute the opportunity cost and reduce the workload of these investment bankers. Let professionals focus more on program design, negotiation and risk control. In addition to these hidden costs, AI can of course reduce the explicit costs of the M&A execution stage. For example, in the due diligence stage, AI has a huge advantage in helping accountants to process massive financial data, and the efficiency and accuracy of performing repetitive work are very guaranteed. With the help of AI, all cases in the market can be quickly analyzed, which will have a strong guiding significance for the key elements of the negotiations between the two parties, such as transaction valuation and payment methods. AI is also a good risk information monitor. The risks faced by M&A transactions include market risk, financial risk, approval compliance risk, integration risk, moral risk, etc. AI can show its prowess in monitoring, analyzing, warning, and coping plans for various risks. AI's ability to acquire data across platforms and analyze massive amounts of data and cases, in a human-machine collaborative mode, can help parties understand their counterparties and partners more comprehensively and objectively, thereby eliminating risks as much as possible, providing more basis for designing plan details, and preventing transaction risks.