In a Package diagram, a Package Merge indicates a relationship between two Packages whereby the contents of the target Package are merged with those of the source Package. Private contents of a target Package are not merged. The applicability of a Package Merge addresses any situation where multiple Packages contain identically-named elements, representing the same thing. A Package Merge merges all matching elements across its merged Packages, along with their relationships and behaviors. Note that a Package Merge essentially performs generalizations and redefinitions of all matching elements, but the merged Packages and their independent element representations still exist and are not affected.
The Package Merge serves a graphical purpose in Enterprise Architect, but creates an ordered Package relationship applied to related Packages (which can be seen under the 'Link' tab in the Package's 'Properties' dialog). Such relationships can be reflected in XMI exports or Enterprise Architect Automation Interface scripts for code generation or other Model Driven Architecture (MDA) interests.
Package Merge relationships are useful to reflect situations where existing architectures contain functionalities involving similar elements, which are merged in a developing architecture. Merging doesn't affect the merged objects, and supports the common situation of product progression.
OMG UML Specification:
The OMG Unified Modeling Language specification, (v2.5.1, p.242) states:
A PackageMerge is a directed relationship between two Packages that indicates that the contents of the target mergedPackage are combined into the source receivingPackage according to a set of rules defined below. It is very similar to Generalization in the sense that the source element conceptually adds the characteristics of the target element to its own characteristics resulting in an element that combines the characteristics of both. Just as a subclass is not normally depicted with its inherited features, a receiving Package is not normally depicted with the merged elements from its mergedPackages.
Also, as with Generalization, a Package may not merge itself (directly or indirectly).
This capability is designed to be used when elements defined in different Packages have the same name and are intended to represent the same concept. A given base concept may be merged for different purposes, with each purpose defined in a separate receiving Package. By selecting different receiving packages, it is possible to obtain a custom definition of a concept for a specific end.