This is more of an architectural decision and depends on several factors. In summary, Merging/Joining two Orgs is not an easy task. There's no right or wrong answer to this, it's just requires more of planning and execution.
Below is my take on this.
In general, not only restricted to any Org merge but any implementation has to be a planned activity. I usually try to identify the overall current situation vs. the future roadmap and start with 5W1H principles.
- Why - everything starts here, as why do you need to implement this (or merge the Orgs). This is the Business Requirement
- What - closely related to What, what is getting implemented, or what are the requirements, or what is getting impacted
- Who - is getting impacted. Usually the Users
When - usually the timelines
And then finally and most important,
- How - how are you going to implement it
While you will usually have answers to the 5W, the most critical and significant piece is the 1H. You will need to carefully evaluate as once you have the clarity, how are you going to take the first step towards your Org merge. You need to consider everything that you current instance is built upon, to name a few:
- Metadata - how are common entities viz., Account, Contact are same/different for both Business Units
- Data - what is the current volume of data vs. what will be brought over. You also need to consider de-dupe of records which may have existed in both instances
- Configurations/Customizations - what config/customizations (record types, validation rules, apex/triggers, etc.) you have in place which impacts common entities, and what is your plan to address those
- Edition/Licenses - what is the financial impact on upgrading your edition/licenses
- Very important and often missed is Regression - once an Org is merged, what is your plan for regression testing the existing implementation
Once you have listed down the important current implementation and the impact of any new merges, you will have a better idea as what is the overall impact of merging your Org.
Overall, what you need to perform here is an impact analysis before you can really take a call of merging two different Orgs.
As for your question:
Do we incorporate NZ Business into our Org and have only their Data integrate into their ERP or do we keep two separate Orgs and find a way to integrate their data into our Org. Or, is there a better option that I haven’t thought of?
If there's a common data that both your NZ and AUS Business Units will be dealing with, it's recommended that you keep a single source of truth for that. It depends what is your source of truth in this case. If you are dealing with data within Salesforce, then while merging consider de-duping the data to retain the quality.
However, if only one of the units need to integrate with ERP, you can always do that in a single instance. It just depends that the new integration will talk from your merged instance vs. the NZ instance.