A pending $23 billion deal between Black Spade Acquisition Co. and VinFast Auto Pte. Ltd. would mark the largest M&A transaction involving a special purpose acquisition company in almost two years.

Black Spade and VinFast, an electric-vehicle maker, announced an agreement in May for the transaction, the second-largest M&A deal announced in 2023 and one of nine $10 billion-plus M&A deals announced through the first five months of the year.

If completed, it would rank as the largest SPAC deal since the transaction between MSP Recovery Inc. and Lionheart Acquisition Corp. II, which was announced in July 2021 with a transaction value of $32.14 billion, according to S&P Global Market Intelligence data.

The only other global M&A deal announced in May that had a $10 billion-plus transaction value was ONEOK Inc.'s $18.83 billion agreement to buy Magellan Midstream Partners LP, which ranks as the fourth-largest M&A deal announced in 2023.

– View transaction statistics across all sectors. – Read the latest M&A and equity offerings white paper. – Read some of the day's top news and insights from S&P Global Market Intelligence.

SPAC slowdown

SPAC issuance and M&A skyrocketed in 2020 and 2021, but the Black Spade deal is just the seventh SPAC M&A transaction to have a value that surpassed $10 billion. In general, the interest in SPACs has waned as the so-called blank-check companies have faced regulatory scrutiny along with pushback from investors.

But some companies still see SPACs as a viable option to go public. VinFast planned to pursue a traditional IPO but withdrew the filing after announcing its deal with Black Spade.

SPAC EV deals

The electric vehicle industry has attracted a good deal of interest from blank-check companies, and the Black Spade-VinFast deal marks the largest SPAC M&A transaction involving an EV company. However, many of the EV companies that went public through SPAC deals have struggled, and some have needed to issue equity at a discount to raise cash levels.

On Feb. 6, EV manufacturer Canoo Inc. said it was selling shares at a 16.0% discount to its previous day's trading price, and in November 2022, luxury EV company Faraday Future Intelligent Electric Inc. announced it was selling shares at a discount as part of a financing plan. A second SPAC deal is helping electric-van maker Arrival shore up financing but carries a valuation far lower than the company's first: In 2021, Arrival closed its $5.74 billion M&A deal with CIIG Merger Corp., and in April, Arrival announced a $742.91 million deal with Kensington Capital Acquisition Corp. V.

Still, the headwinds have not deterred Black Spade from venturing into the EV space. In its IPO filing, Black Spade said it could pursue a business combination in any industry, but it was targeting the entertainment industry in an effort to leverage the experience of its founder and management team. Instead, the company followed the lead of many other SPACs and is attempting to combine with a company from the electric vehicle industry.