Merging can resolve differences automatically, based on the following rules:
If a line has not changed in all three files, it is placed in the output file.
If a line has changed in one of the descendants, the changed line is placed in the output file. Changes could be the addition or removal of an entire line, or an edit to a line.
If identical changes have been made to a line in both descendants, the changed line is placed in the output file.
If a line has been edited in both descendant files so that it is different in all three files, no line is placed in the output file. You must decide how to resolve the difference--either by choosing a line from a descendant, or by editing the merged file by hand.
When Merging automatically resolves a difference, it changes the glyphs to outline font. Merging lets you examine automatically resolved differences to be sure that it has made the correct choices.
You can disable Auto Merge by choosing Options > Auto Merge. When automatic merging is disabled, the output file contains only the lines that are identical in all three files. You must resolve the differences.
If you do not specify an ancestor file, Merging has no reference with which to compare a difference between the two input files. Consequently, Merging cannot determine which line in a difference is likely to represent the desired change. The result of an auto merge with no ancestor is the same as disabling automatic merging: Merging constructs a merged file using only lines that are identical in both input files. You must resolve the differences.