Analyzing European SPACs

Abstract

This article analyzes Special Purpose Acquisition Companies (SPACs) in Europe. We document various aspects associated with European SPACs by using a unique, handcollected data sample encompassing the 19 SPACs that have been listed on European stock exchanges since 2005. The article shows that in spite of being listed on European stock exchanges, many SPACs do not have a European focus, neither in terms of investors, nor in their choice of target companies. Additionally, our results show that there is a great heterogeneity in the choice of target companies among SPACs, especially with regard to financial performance, and that SPAC investors react negatively to the choice of an underperforming target company.