Mergers and acquisitions (M&A) continue to increase in value and frequency, yet little research has examined the information systems decisions involved in these events. This research addresses this gap by identifying the factors that influence the selection of IT merger strategies (support, synthesize, replace) for the application systems in the acquired company.

Using a grounded theory approach, prior Management and IS literature was surveyed to develop sensitivity to some potentially influential factors. Data was then collected for six acquisitions in three organizations through semi-structured retrospective interviews with the business and IS managers involved in the selection of an IT merger strategy for the information systems in each acquisition. Through the case data analyses it was found that the cost benefit of the IT merger strategy, corporate enterprise integration and financial goals, systems functionality, the IT governance approach of the acquiring company, legal and regulatory issues, and information system platform capabilities were factors that directly influenced one or more IT merger strategy decisions. Furthermore, it was found that organizations might select one IT merger strategy for a systems application, but apply another, based on the cost benefit of the IT merger strategy and the business priority for the IT project to implement it.

After these findings from an iterative open and axial coding process are presented, a theoretical model and a set of propositions derived from the model are proposed. This grounded theory is argued to be generalizable to other acquisitions, and a useful guide for practice.