First Middle East Spac lists in Abu Dhabi

The first special purpose acquisition company to be listed in the Middle East closed higher on its first day of trading in Abu Dhabi on Friday.

ADC Acquisition Corporation, backed by the oil-rich emirate’s government, is the latest in a string of blank-cheque companies from the region as liquidity surges thanks to sky-high oil prices, and domestic capital markets are busy with initial public offerings of stakes in government-linked firms.

The spate of IPOs is attracting money from outside the region, with global managers looking to take advantage of the higher-growth environment and also tap the region’s sovereign funds for investment.

“Ultimately, we aim to enhance the business environment in Abu Dhabi and contribute to establishing the UAE’s capital as a leading hub for private companies seeking to go public,” said Mohamed Alsuwaidi, chair of ADC and chief executive of ADQ, an Abu Dhabi state holding company that is co-sponsor of the Spac.

ADC, which raised about $100mn in the listing, said it would seek a target company with “their main operations in the UAE and across the Middle East and north Africa”.

ADC was established by ADQ and Chimera Investment, a unit of the private Royal Group, which is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s powerful national security adviser. Sheikh Tahnoon also chairs ADQ.

Although Spacs have struggled to achieve their promise and fallen out of fashion in other markets, a number of businesses in the Middle East are considering the option.

Bahrain-based Investcorp is working on a plan to list a regional Spac raising as much as $250mn in the UAE, people with knowledge of the plans said. This listing, potentially in Dubai, would be the global asset manager’s third Spac in a year, following two listings in the US that are searching for targets in Europe and India, respectively.

Gulf Capital, a UAE-based private equity firm, is also eyeing a Spac listing of about $150mn in Abu Dhabi, a person briefed on the details said.

Shuaa Capital, a Dubai-listed investment bank, in March listed a $100mn Spac on Nasdaq, seeking a merger with a technology or fintech company in the Middle East. Mubadala, an Abu Dhabi sovereign wealth fund, raised a $200mn Spac last year.

As oil prices have soared following Russia’s invasion of Ukraine, the pace of IPOs has picked up, most recently with the listing of a stake in Borouge, a plastics producer owned by Abu Dhabi’s national oil company and Austria’s Borealis.

“Our pipeline of new listings and IPOs remains robust,” said Saeed Al Dhaheri, chief executive of Abu Dhabi’s stock exchange.