Although they still raise some questions, a SPAC is clearly an investment vehicle with great possibilities for Spain.

A Special Purpose Acquisition Company (SPAC) is a shell company created for the sole purpose of carrying out an Initial Public Offering (IPO), and using the funds raised in such operation to acquire and merge with a private company. Thus, the private company becomes listed on the Stock Market, avoiding a process that is normally much longer and more tedious.


SPACs have existed in the United States since the 1990s, operating across different industries, from technology, healthcare, logistics, media, retail and communications, among many others. Their history began in the US with the help of investment bank GKN Securities, which developed the initial draft that still serves as a model and operations manual. However, it was not until 2003 that SPACs began to enjoy a true revival and their use has skyrocketed in a large number of industries.


The rapid growth of venture capital funds and the lack of attractive returns available in traditional asset classes led institutional investors to popularize the SPAC structure, taking into account the great appeal and potential for significant returns that they proposed. In the US, and in the rest of the markets that follow their trends, support by the Securities and Exchange Commission (SEC) and the participation in these operations by long-established investment banks such as Citigroup, Merrill Lynch and Deutsche Bank has been key, which has been crucial in legitimizing the product and confirming that this technique will be useful in the long term.

Legal-Economic Structure

From a legal-economic point of view, an IPO through a SPAC is similar to a standard reverse merger, that is, the acquisition of a private company by an existing public company so that the private company can bypass the complex stock exchange listing process. However, in this case, SPACs are born with a clean public company, but usually with a luxury management team and a lot of clarity about any future financing required. SPACs are essentially configured as a blank check, with a high level of trust placed in the managers, although limited by certain criteria for a subsequent acquisition. This operation will be subject to certain rules or veto rights of those investors who are dissatisfied.

Read the full article published in CincoDías (Spanish) here.