Infrastructures de marché

SPAC as an Alternative
to a Traditional IPO

Créé le

06.12.2022

SPACs are not a recent creation. They belong to the broad category of blank check companies, a concept that emerged in the 80s in the United States. However,
over the last couple of years, the number of SPACs has widely increased, raising
the question of whether SPACs can be considered as an alternative to a traditional IPO.

Alumnus ESCP

From a structural perspective, turning a company public via a SPAC is an alternative. Indeed, compared to a traditional IPO, a SPAC operation is a two-tiered process. After raising capital through a common IPO, the SPAC merges with the target in the so-called “de-SPAC” transaction. Beyond being an alternative, a SPAC is regularly viewed as benefiting from a different legal regime. For instance, in the US, the business combination (de-SPAC transaction) has been, several times, regulated under merger laws to the detriment of securities law.

From the investor’s point of view, a SPAC is also a substitute ...