This paper examines the impact of managerial objectives on the outcomes of acquisitions, focusing on a sample of 327 US acquisitions between 1975 and 1987. The authors find that bidding firms' returns are systematically lower when their firm diversifies, when they buy rapidly growing targets, and when the performance of their managers has been poor before the acquisition. These findings suggest that managerial objectives, rather than shareholder interests, drive bad acquisitions. The paper also explores the relationship between bidders' past performance and their returns from acquisitions, finding that poor managers are particularly bad acquirers. Additionally, the market penalizes unrelated diversification more heavily in the 1980s compared to the 1970s, coinciding with the rise of hostile takeovers. The results support the idea that managers pursue acquisitions to achieve personal objectives, such as growth or risk reduction, which can lead to poor investment decisions for shareholders.This paper examines the impact of managerial objectives on the outcomes of acquisitions, focusing on a sample of 327 US acquisitions between 1975 and 1987. The authors find that bidding firms' returns are systematically lower when their firm diversifies, when they buy rapidly growing targets, and when the performance of their managers has been poor before the acquisition. These findings suggest that managerial objectives, rather than shareholder interests, drive bad acquisitions. The paper also explores the relationship between bidders' past performance and their returns from acquisitions, finding that poor managers are particularly bad acquirers. Additionally, the market penalizes unrelated diversification more heavily in the 1980s compared to the 1970s, coinciding with the rise of hostile takeovers. The results support the idea that managers pursue acquisitions to achieve personal objectives, such as growth or risk reduction, which can lead to poor investment decisions for shareholders.