Sectoral differences in short- and long-term performance of Special Purpose Acquisition Companies (SPACs)

Details

Supervisors

Grégoire, Philippe

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée

Abstract

Special Purpose Acquisition Companies (SPACs) are companies without any commercial operations, and which are created strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing private company. This study aims to assess whether the performance of SPACs differ across the different sectors in which the target companies operate. To conduct this analysis, a sample of 457 U.S listed SPACs that completed an M&A operation between July 2016 and April 2023 was used. The analysis documents an average short‐term announcement return of +4.4% and a 1‐year abnormal return of −41.58% starting from the merger’s closing date. Additionally, the findings demonstrate that there is no statistically significant difference in the performance of SPACs across the different sectors, both in the short-term and long-term.