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Published
2025-12-07
Section
Regular Issues
License
Copyright (c) 2025 Artha: Journal of Business and Finance
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
How to Cite
Impact of ESG Considerations on Deal Success and Post-Merger Performance of SPACs
Himanshi
Kaushik Roy
Keywords: Special purpose acquisition vehicle, renewable SPACs, de-SPAC, initial public offering (IPO)
Abstract
Special Purpose Acquisition Companies (SPACs) emerged as prominent IPO alternatives during 2020-2025, with renewable energy representing substantial SPAC activity amid growing ESG investment focus. This study addresses critical literature gaps by conducting the first comprehensive performance comparison between renewable and traditional (Oil & Gas and Mining) SPACs using standardized metrics. Analyzing 86 completed transactions (2021-2025), we examined deal success indicators and post-merger performance across sectors. Results decisively reject the hypothesis of superior renewable SPAC performance. Traditional SPACs demonstrated significant advantages, with renewable SPACs delivering median 12-month returns of -46.06% versus traditional SPACs' -14.75% (p<0.05), despite paying higher enterprise multiples (4.1x vs 3.1x). These findings contradict ESG investment theory, revealing systematic overpayment during the renewable investment boom and providing crucial insights for investors and policymakers regarding sustainable investment strategies.
