SPACs — Money Goes Public

In times of low interest rates, investors are looking for new forms of investment. For a short time now, Special Purpose Acquisition Companies (hereinafter abbreviated:
"SPAC") has become very popular. These are listed companies that only hold cash and are therefore often referred to as "blank check companies". Over a period of 18 to 24 months, a target company will be sought with which SPAC will merge.2 The target company may have its registered office in Germany or abroad. In 2020, there were about 250 SPACs listed on the stock market with a total value of $79 billion; in January 2021, their value increased by $40 billion.3 Interest in SPACs is growing, particularly in the USA, while European investors are still reluctant. Hundreds of SPACs are currently looking for companies to acquire, with approximately 400 in the US. 4 However, the entry of a company that will later operate on the capital market brings not only opportunities but also challenges, especially for the target company. The following comments highlight the requirements and challenges of a SPAC transaction and provide an overview of developments in the German environment.