M&A deals in Hong Kong hit 4-year high as start-ups raced to merge with blank-cheque companies for foreign listings

Name: SPACs: Everything you need to know about the finance world’s new big thing
Uploaded: 2021-12-28T12:52:42.000Z
Duration: 3 min 34 s
Description: SPACs: Everything you need to know about the finance world’s new big thing

Some 1,529 deals worth a combined US$182.79 billion were signed this year, the highest since 2017, Refinitive data shows

Hong Kong will allow SPAC listings from January, but many Hong Kong-based companies have already been involved in deals with overseas-listed SPACs

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Mergers and acquisitions activity involving Hong Kong companies hit the highest level in four years. Photo: Sam Tsang

Enoch Yiu

Published: 8:52pm, 28 Dec 2021Updated: 9:23pm, 28 Dec 2021

Mergers and acquisitions activity involving Hong Kong companies hit the highest level in four years as deal-making received a boost from start-ups going public by merging with blank-cheque companies.

Some 1,529 deals worth a combined US$182.79 billion were announced this year, a 49 per cent increase in value from 2020, according to data company Refinitiv. It was the highest since 2017, when transactions totalled US$207.52 billion.

Driving the growth is a new form of fundraising that uses special purpose acquisition companies (SPACs). Typically anchored by well-known public figures such as celebrities, sports icons and famous entrepreneurs, they raise capital to buy assets within a set period, usually between 18 months and two years.

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SPACs: Everything you need to know about the finance world’s new big thing

Hong Kong Exchanges and Clearing (HKEX), the local bourse operator, will allow SPAC listings from January 1. But many Hong Kong based companies have already been involved in deals with overseas-listed SPACs.

The biggest is Polestar, a Swedish electric vehicle (EV) brand backed by Oscar-winning actor Leonardo DiCaprio, Volvo Car Group and China’s Zhejiang Geely Holding. The company listed its stock on the Nasdaq in September by merging with a US-listed SPAC backed by billionaire Alec Gores and investment bank Guggenheim Partners, valuing it at US$20 billion, according to Refinitiv.

Hong Kong-based Polestar Automotive Holding is the ultimate parent of the EV maker formed in 2017.

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In November, another SPAC known as Blue Safari Group Acquisition Corp of Hong Kong acquired cryptocurrency mining platform Bitdeer Technologies at a valuation of US$4 billion, ranking it the fourth-largest deal in the city. Bitdeer, a spin off from Chinese bitcoin mining giant Bitmain, aims to list on the Nasdaq when the merger is complete.