WTW’s Miguel de Bruno Guerra: The growing power of AI in the dealmaking process

In this excerpt from our 2025 European M&A Outlook Report, which features insights from 12 leading European dealmakers, Miguel de Bruno Guerra, Head of M&A Due Diligence and Lenders Insurance Advisory Practice at WTW, talks M&A pick up, the evolution of due diligence practices and the growing power of artificial intelligence (AI) in the dealmaking process. Deep dive into Miguel’s insights below. 

Global M&A activity in 2024 was on the rise – certainly in value if not volume terms after a disappointing 2023 – do you expect more activity and how do you view the European M&A market for the next 18 months and beyond?

While 2024 was certainly active, the final quarter fell below our expectation in terms of the number of M&A transactions changing hands. The fact is we haven’t seen the quantity of deals we anticipated. That said, we expect M&A numbers to pick up in the second quarter of 2025 and into the final half of next year.

Market opportunities are presenting themselves in the technology sector, and we are starting to see more movement in the energy sector. We expect interest in these sectors to remain high over the course of 2025, with dealmaking in the health and education sectors also experiencing greater levels of activity.

What facets of due diligence are dealmakers increasingly prioritising in transactions?

European dealmakers are increasingly taking a holistic view of the risks and opportunities impacting the M&A process. As such, due diligence practices have evolved to cover a broad range of concerns reflective of today's business environment. 

While traditional due diligence focusing on financial, legal, labour and insurance aspects will continue to be necessary, dealmakers are placing more weight on risks relating to environmental, social and governance (ESG) issues, cybersecurity, tax compliance, cultural alignment and supply chain resilience. Assessing these factors has become critical in ensuring deal success in today’s M&A environment.

In relation to ESG, dealmakers are coming under increasing pressure from regulatory authorities and consumers to invest in a sustainable manner. In response, they are sharpening their focus on a target's sustainability record, environmental impact and social responsibility practices.

It is clear that issues such as reducing carbon emissions and improving workplace diversity have become material concerns that directly impact the ultimate value of a deal. The insurance market is evolving its products and services – such as environmental liability and climate risk insurance – to meet with demand.

Cybersecurity and data privacy are also high on the agenda. These issues have taken centre stage following some high-profile cyber-attacks and strict data privacy regulation under the General Data Protection Regulation (GDPR). Dealmakers need to assess a target’s ability to protect sensitive information under data protection laws, as a breach or non-compliance could lead to significant financial damage.

From an insurance advisory perspective, we are seeing dealmakers sharpen their focus on tax risk. Rising uncertainty and complexity in the global tax environment, particularly surrounding strict regulation and greater scrutiny from tax authorities, is putting tax issues under the spotlight. Due diligence in this area can focus on analysing tax exposure and transfer pricing policies to better understand the risk, preventing a potentially costly surprise post-transaction.

A greater focus is also being placed on cultural alignment and preserving human capital post-deal. In-depth due diligence helps both parties evaluate how they can combine work cultures and leadership styles successfully throughout the deal process. Compensation structures need to be aligned, and the risk of talent loss mitigated.

How is AI impacting the due diligence and dealmaking process?

AI technology is having a transformative impact across the whole of society, and the dealmaking process is no exception. It has become an important tool within the due diligence process to increase efficiency, reduce manual workloads, and provide deeper insights into risks and opportunities surrounding a deal.

By automating data review, improving risk assessment and offering advanced predictive analytics, AI enables dealmakers to make better informed and faster decisions. On the legal side, AI offers the potential to review a large volume of information and quickly identify key clauses that could impact a deal.

Timeliness is key, as there may only be a very short period of time when a buyer is interested in a transaction. Dealmakers need to have the tools ready to ensure they have all the relevant data at hand to go ahead with the transaction. 

This will, of course, improve the ultimate success rate of transactions. Yet, in reality, AI technology brings with it certain challenges. One major issue is cybersecurity and privacy risk. Sensitive financial and personal data used by AI tools creates additional cybersecurity vulnerabilities, putting deal confidentiality at risk.

Another challenge is data quality, as the effectiveness of AI depends almost entirely on the quality of the data it is trained on. If the underlying data is incomplete or inaccurate, the technology will produce misleading insights, potentially derailing a transaction.  

And finally, but no less importantly, the use of AI brings with it the risk of job displacement. Areas such as financial analysis, legal reviews, or data management are particularly vulnerable to this trend. Dealmakers need to strike a balance between preserving AI's advantage while ensuring quality issues and ethical concerns are properly addressed.