Managerial hubris is the unrealistic belief held by managers in bidding firms that they can manage the assets of a target firm more efficiently than the target firm's current management.
Managerial hubris is one reason a manager may choose to invest in a
merger that on average generates no
profits.
[{{cite book, title=Strategic Management and Competitive Advantages, author=Jay B. Barney and William S. Hesterly, page]
380
publisher=Pearson Prentice Hall, date=2008, isbn=0-13-613520-X, url=https://archive.org/details/strategicmanagem0000barn/page/380
See also
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Leveraged buyout
A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loa ...
References
Management
Mergers and acquisitions