The disruption of due diligence: How generative AI is transforming M&A due diligence processes

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School of Business | Master's thesis
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2025-04-28

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Mcode

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Master's programme in Information and Service Management

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en

Pages

50

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Abstract

This thesis explores the emerging role of Generative Artificial Intelligence (GenAI) in transforming due diligence processes within mergers and acquisitions (M&A), with a particular focus on financial and operational due diligence conducted by large consulting firms. M&A due diligence is traditionally a labour-intensive, high-stakes process requiring precise analysis under time pressure. The recent advancements in GenAI, particularly in text generation, summarization, and data interpretation, raise questions about its practical value and limitations in this new context. The study adopts a qualitative research approach based on nine semi-structured interviews with professionals involved in M&A advisory and consulting roles across various career levels. Thematic analysis was used to identify recurring patterns and insights, interpreted through the Technology–Organization–Environment (TOE) framework, extended to include the dimension of workforce transformation. Findings reveal that GenAI is primarily used for supporting documentation tasks such as report structuring, proposal drafting, and text summarization. It is not yet widely applied in core financial analysis or risk evaluation due to concerns over hallucinations, data privacy, and lack of transparency. Adoption is inconsistent across firms and often depends on individual initiative rather than systematic integration. Some other findings include emerging ethical considerations regarding pricing, the rise of informal “GenAI activists”, and growing recognition of prompting as a critical professional skill. The study concludes that GenAI is more likely to enhance than replace human expertise, particularly in junior-level roles. It suggests that GenAI adoption may reshape traditional consulting workflows, create new training needs, and shift analytical emphasis from data processing to interpretive judgment. By filling a gap in the academic literature, the research offers theoretical contributions and practical implications for how AI integration in M&A due diligence may evolve.

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Supervisor

Penttinen, Esko

Thesis advisor

Penttinen, Esko

Keywords

GenAI, AI, M&A, due diligence, tekoäly, yrityskaupat

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https://urn.fi/URN:NBN:fi:aalto-202505143677

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[gradu] Kauppakorkeakoulu / BIZ