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+To merge files Mercurial uses merge tools.
+
+A merge tool combines two different versions of a file into a merged
+file. Merge tools are given the two files and the greatest common
+ancestor of the two file versions, so they can determine the changes
+made on both branches.
+
+Merge tools are used both for :hg:`resolve`, :hg:`merge`, :hg:`update`,
+:hg:`backout` and in several extensions.
+
+Usually, the merge tool tries to automatically reconcile the files by
+combining all non-overlapping changes that occurred separately in
+the two different evolutions of the same initial base file. Furthermore, some
+interactive merge programs make it easier to manually resolve
+conflicting merges, either in a graphical way, or by inserting some
+conflict markers. Mercurial does not include any interactive merge
+programs but relies on external tools for that.
+
+Available merge tools
+"""""""""""""""""""""
+
+External merge tools and their properties are configured in the
+merge-tools configuration section - see hgrc(5) - but they can often just
+be named by their executable.
+
+A merge tool is generally usable if its executable can be found on the
+system and if it can handle the merge. The executable is found if it
+is an absolute or relative executable path or the name of an
+application in the executable search path. The tool is assumed to be
+able to handle the merge if it can handle symlinks if the file is a
+symlink, if it can handle binary files if the file is binary, and if a
+GUI is available if the tool requires a GUI.
+
+There are some internal merge tools which can be used. The internal
+merge tools are:
+
+``internal:merge``
+   Uses the internal non-interactive simple merge algorithm for merging
+   files. It will fail if there are any conflicts and leave markers in
+   the partially merged file.
+
+``internal:fail``
+   Rather than attempting to merge files that were modified on both
+   branches, it marks them as unresolved. The resolve command must be
+   used to resolve these conflicts.
+
+``internal:local``
+   Uses the local version of files as the merged version.
+
+``internal:other``
+   Uses the other version of files as the merged version.
+
+``internal:prompt``
+   Asks the user which of the local or the other version to keep as
+   the merged version.
+
+``internal:dump``
+   Creates three versions of the files to merge, containing the
+   contents of local, other and base. These files can then be used to
+   perform a merge manually. If the file to be merged is named
+   ``a.txt``, these files will accordingly be named ``a.txt.local``,
+   ``a.txt.other`` and ``a.txt.base`` and they will be placed in the
+   same directory as ``a.txt``.
+
+Internal tools are always available and do not require a GUI but will by default
+not handle symlinks or binary files.
+
+Choosing a merge tool
+"""""""""""""""""""""
+
+Mercurial uses these rules when deciding which merge tool to use:
+
+1. If a tool has been specified with the --tool option to merge or resolve, it
+   is used.  If it is the name of a tool in the merge-tools configuration, its
+   configuration is used. Otherwise the specified tool must be executable by
+   the shell.
+
+2. If the ``HGMERGE`` environment variable is present, its value is used and
+   must be executable by the shell.
+
+3. If the filename of the file to be merged matches any of the patterns in the
+   merge-patterns configuration section, the first usable merge tool
+   corresponding to a matching pattern is used. Here, binary capabilities of the
+   merge tool are not considered.
+
+4. If ui.merge is set it will be considered next. If the value is not the name
+   of a configured tool, the specified value is used and must be executable by
+   the shell. Otherwise the named tool is used if it is usable.
+
+5. If any usable merge tools are present in the merge-tools configuration
+   section, the one with the highest priority is used.
+
+6. If a program named ``hgmerge`` can be found on the system, it is used - but
+   it will by default not be used for symlinks and binary files.
+
+7. If the file to be merged is not binary and is not a symlink, then
+   ``internal:merge`` is used.
+
+8. The merge of the file fails and must be resolved before commit.
+
+.. note::
+   After selecting a merge program, Mercurial will by default attempt
+   to merge the files using a simple merge algorithm first. Only if it doesn't
+   succeed because of conflicting changes Mercurial will actually execute the
+   merge program. Whether to use the simple merge algorithm first can be
+   controlled by the premerge setting of the merge tool. Premerge is enabled by
+   default unless the file is binary or a symlink.
+
+See the merge-tools and ui sections of hgrc(5) for details on the
+configuration of merge tools.