Green SPACs

Abstract

AbstractWe examine the structural characteristics of special purpose acquisition companies (SPACs) focused on green causes. We explain their ecosystem, primary determinants of initial public offering (IPO) size, and speed of going public, and we calculate their returns around merger announcements and subsequent acquisition. Green SPAC size depends on CEO characteristics, choice of exchange and specialisation of respective stakeholders. The speed to IPO is related to the respective concentration of legal counsel. Green SPACs exhibit cumulative market‐adjusted returns in the range 6%–12% around the merger announcement. Merger returns are positive at the merger date but quickly become negative (−1% to −9%) and decline further with time.