This can happen when the queries in use is not marked as a selection. Follow the steps below to mark the query as a selection.
  1. Navigate to Analysis, then click on Information library
  2. Click the drop down next to your query, and select Edit
  3. Click the Set save options tab
  4. Mark to Create a selection
  5. Mark to show the query in the Query Designer
  6. Save and Close
Now go back to the information library and try to merge the two queries.