Special purpose acquisition companies (or SPACs) saw a significant increase in popularity in 2020, which has continued into 2021. This trend, which largely started in the United States, has spread to global capital markets hubs, including many in Europe. As a result, European based investors, sponsors, targets and regulators are focused on the SPAC model and ensuring that transactions are structured in compliance with the existing regulatory framework. Certain National Competent Authorities (NCAs) are also taking steps to build a new regulatory framework for SPACs looking to list in their market.

SPACs offer an alternative way of raising funds, through an initial public offering, prior to buying a target operating company. SPAC management teams typically target an industry or sector, but not a particular company, before IPO. Once a SPAC goes public it has a set timeframe — usually 18 to 24 months — to use its funds to acquire a target (the de-SPAC), or else return the funds to its investors.