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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 UML specification (UML Superstructure Specification, v2.1.1, p. 113-114) states:
A package merge is a directed relationship between two packages that indicates that the contents of the two packages are to be combined. 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.
This mechanism should be used when elements defined in different packages have the same name and are intended to represent the same concept. Most often it is used to provide different definitions of a given concept for different purposes, starting from a common base definition. A given base concept is extended in increments, with each increment defined in a separate merged package. By selecting which increments to merge, it is possible to obtain a custom definition of a concept for a specific end. Package merge is particularly useful in meta-modeling and is extensively used in the definition of the UML metamodel.
Conceptually, a package merge can be viewed as an operation that takes the contents of two packages and produces a new package that combines the contents of the packages involved in the merge. In terms of model semantics, there is no difference between a model with explicit package merges, and a model in which all the merges have been performed.