SPAC IPO Volume Plummets Last Year... Merger Success Rate Only 38.5%

Financial Supervisory Service Releases White Paper on SPAC Market Investment

The amount of funds raised through Special Purpose Acquisition Company (SPAC) IPOs last year plummeted by more than 30% compared to the previous year. The proportion of SPAC IPOs within the overall IPO market dropped to 5.7%, and the success rate of SPAC mergers also fell sharply to 38.5% year-on-year.

According to the Financial Supervisory Service on March 22, 2026, the number of completed SPAC IPOs in 2024 was 25, a 37.5% decrease from the previous year (15 deals). In terms of funds raised, the amount totaled 270.4 billion won, representing a 32.2% decline. This falls short of the five-year annual average of 34.4 deals and 403.0 billion won. An official from the Financial Supervisory Service explained, "Since the peak of 45 deals in 2022, there has been a gradual decline."

Last year, the proportion of funds raised through SPAC IPOs in relation to total funds raised was 5.7%, down 3.6 percentage points from 9.3% in the previous year. The share of SPACs in the capital-raising market through IPOs has been steadily shrinking. In terms of the number of deals, SPACs accounted for 24.8% of all IPOs last year, down from 34.2% in 2024.

Additionally, the number of SPACs that successfully completed mergers last year was 15, two fewer than the previous year. Meanwhile, the number of SPACs delisted due to failed mergers surged to 24, an increase of 16. An official from the Financial Supervisory Service stated, "Compared to the five-year average, the number of successful mergers only fell slightly, but the sharp increase in failed cases led to a significant drop in the previously stable merger success rate." The SPAC merger success rate was 69.2% in 2023, 68.0% in 2024, and plunged to 38.5% in 2025.

As of the end of 2025, there are reportedly 86 SPACs currently pursuing mergers. Among the 78 SPACs searching for targets, the majority (43.6%) are in their second year, while 32.1% are in their first year and 24.3% are in their third year. Notably, compared to the previous year, the portion in their first year has decreased, while those in their second and third years have increased, indicating that delays in mergers are leading to the aging of SPACs. SPACs are required to complete a merger within three years of listing; if they fail to do so, the funds are returned to investors at the offering price plus accrued interest.

Despite the shrinking market size, speculative trading patterns at the initial listing stage continue. Abnormal trading patterns, such as sharp rises or drops in SPAC stock prices on the first day of listing, are repeatedly observed. For example, last year, SPAC shares opened at 2,000 won, surged to an intraday average of 4,067 won—about twice the offering price—then fell back to an average of 2,227 won.

An official from the Financial Supervisory Service commented, "Given that SPACs are shell companies that do not conduct business operations and only hold cash, repeated short-term price spikes are deemed speculative and unrelated to fundamental valuations."

Accordingly, the Financial Supervisory Service plans to develop and implement both short- and long-term measures to ensure that SPACs remain a sound system in the capital market from the perspectives of both companies and investors. To prevent irrational price swings on the first day of listing, the agency will expand consumer alerts and strengthen the review of SPAC disclosure documents. In addition, to enhance investor protection, measures to eliminate regulatory arbitrage between SPACs and traditional IPOs will be considered and promoted.

An official from the Financial Supervisory Service advised, "Contrary to the perception that SPACs are relatively low-risk, investing in SPACs trading at a premium to the offering price can result in significant losses. Investors in SPACs should thoroughly understand the relevant system and carefully review the disclosures posted on the Financial Supervisory Service's DART system before making investment decisions."

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