16 September 2021
Are Netherlands and Luxembourg taking over as the European hubs for SPACs?
SPACs, which allow investors to pool resources in a public investment vehicle with the intent to acquire existing businesses, are far from being a new concept. Indeed, SPACs (or Special Purpose Acquisition Companies) have existed for decades on public markets.
However, they have recently become one of the hottest market trends in the private equity space. Globally, SPACs have raised nearly US$100 billion from IPOs in the first quarter of 2021, already surpassing all of 2020, according to financial data provider Refinitiv. In the US alone, SPACs represented about 60 percent of all IPOs in 2020.
While Europe took a bit more time to jump onto the SPAC bandwagon, it is now actively following suit with jurisdictions like the Netherlands and Luxembourg leading the way for the domiciliation of SPAC structures. To illustrate the growing popularity of SPACs in these jurisdictions in the recent past, Amsterdam has set up six SPACs since the start of 2021 and Luxembourg has set up three SPACs over the same period.
Indeed, SPACs are flocking to the Netherlands, enticed as they are by the city’s flexible rules and international repute. The stellar image of its stock exchange, the Euronext Amsterdam, as a home to leading global companies, only adds to its appeal. These factors work together to ensure that it is well poised to take over as a European hub for SPACs, together with Luxembourg, which saw the launch of its first SPAC after a decade in February 2021 and is already promising to become another regional hub for this type of funding structure, blessed as it is with a flexible and tax-efficient legal framework.
Luxembourg and the Netherlands both offer the added ability to rely on the European passport mechanism set forth in the Prospectus Regulation to list these vehicles on other European stock exchanges.
In order to understand the newly acquired popularity of SPACs in Europe, our speakers will join us in an exclusive webinar to discuss the following themes:
- Why are SPACs gaining traction in Europe?
- What are the differences in US and European listing rules that make US exchanges more SPAC-friendly?
- Why are SPACs being used increasingly as funding structures by PE firms?
- How can Luxembourg and the Netherlands be used as domiciles for SPACs and how can the passport mechanism set forth in the Prospectus Regulation be used to list these vehicles on the Paris or Frankfurt Stock Exchange?
- Will the reforms undertaken by the London Stock Exchange around SPACs make London the preferred domicile for SPACs?
- Last but not the least, is the growing popularity of SPACs simply a bubble waiting to burst, or is the trend here to stay?
This event will include speakers Pascal Rapallino and Emma Causevic.