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This article examines the performance of acquisitions in Slovenia in the period of transition between communist rule and the advent of the market economy. The proposition is that, once the motives of an acquisition are identified, the success or failure of a particular acquisition can be measured by examining the extent to which those motives have been achieved. The actual realisation of some motives for acquisitions, such as to transfer skills and share activities, is strongly tied to the ROE and value added per employee in the acquired company in the post-acquisition period. On the other hand, realisation of financial synergies has not resulted in higher ROE or value added per employee. Based on our research into 45 acquisitions in Slovenia, we pinpointed some key success factors that determined the performance of the acquired firm. From the point of view of a local firm that was sold, the key question was how the acquirer would ensure the company's long-term development.

In our study, we managed to include companies involved in six different industries. Diversification is the most frequently used corporate strategy. Our study reveals that 43.3% of companies diversified through external means, 26.7% diversified through internal means, while 30% diversified through both internal and external methods. Retrenchment strategies are relatively unpopular because retrenchment seems to imply failure. The orientation of most top management towards growth strategies has resulted in a strong preference for acquisitions and joint ventures. 90.3% of companies are expanding their operations internationally. In our paper, we also examine the motives for developing a specific corporate strategy. Special attention is given to the core competencies and skills that have proved to be the cornerstones of the competitive advantages of companies.

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<p class="MsoBodyTextIndent" style="margin: 0in 0.5in 0pt; mso-pagination: none; tab-stops: .5in 58.5pt;"><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-family: Times New Roman;">This paper argues that unrelated diversification strategies outperform related diversification strategies. <span style="mso-spacerun: yes;">&nbsp;</span>The author identifies three phases of the internationalisation process. <span style="mso-spacerun: yes;">&nbsp;</span>More detailed analyses of the internationalisation process shows that companies are trying to develop more complex forms of international business activities. <span style="mso-spacerun: yes;">&nbsp;</span>The author also identifies four groups of competencies that are the cornerstones of corporate strategies. <span style="mso-spacerun: yes;">&nbsp;</span>This study reveals that 40.6% of companies diversified through external means, 36.2% diversified through internal means, while 23.2% diversified through both internal and external methods. <span style="mso-spacerun: yes;">&nbsp;</span>There appears to be no statistically significant performance differences among companies regarding external and internal growth strategies. <span style="mso-spacerun: yes;">&nbsp;</span>Internal growth and joint ventures are the most important forms of diversification. <span style="mso-spacerun: yes;">&nbsp;</span>These companies also tend to develop various forms of long-term strategic co-operation. <span style="mso-spacerun: yes;">&nbsp;</span>This process can be crucial for developing competitive advantages. <span style="mso-spacerun: yes;">&nbsp;</span>By comparing the performance of companies regarding ownership structure, the author found that companies with international ownership structure performed better.<span style="mso-spacerun: yes;">&nbsp; </span>In other words, foreign ownership had a positive influence on company performance.</span></span></p>