Exploring AI-ESG-Driven Synergies in M&A Transactions: Open Innovation and Real Options Approaches

Andrejs Čirjevskis ()
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Andrejs Čirjevskis: Faculty of Business and Economics, RISEBA University of Applied Sciences, Meza Street 3, LV-1048 Riga, Latvia

JRFM, 2025, vol. 18, issue 10, 1-40

Abstract: This study aims to explore the intersection of Artificial Intelligence (AI), Environmental, Social, and Governance (ESG) factors, and Open Innovation (OI) within the context of mergers and acquisitions (M&A). As ESG considerations increasingly influence corporate strategy and valuation, integrating AI offers powerful tools for enhancing due diligence, reducing risks, and creating long-term value. Building on the ARCTIC framework, an extension of the VRIO framework and real options theory, this paper introduces a new method for measuring AI-ESG-OI-driven synergies in mergers and acquisitions. It highlights the crucial role of Open Innovation in facilitating cross-boundary knowledge exchange, federated learning, and collaborative ESG data analysis. Based on recent advances in AI-ESG-enabled OI practices, such as multi-agent systems, synthetic data, and decentralized innovation, this paper shows how companies can address ESG complexity and cultural integration challenges. The findings indicate that incorporating OI principles into AI-ESG strategies not only enhances decision-making but also aligns M&A activities with evolving investor expectations and sustainability goals. The study concludes with practical insights and directions for future research in AI-driven, ESG-aligned corporate innovation.

Keywords: artificial intelligence; open innovation; environmental; social; governance (ESG); mergers and acquisitions; synergies; real options (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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