I am facing some issues with ArcGIS 10. When I merge to polygons either of the one or both the polygons gets deleted. I tried this on multiple shapefiles and also on geodatabase, but still getting the same result. this polygons were created as kml on Google Earth and the converted from kml to layer in ArcMap. Projection of both are same. Below are the screenshots of the merging process for reference.
1. Selected one polygon:
2. Selected another polygon:
3.Selected merge tool from Editor:
4. Result of the merge: Both features got deleted but on of the attribute which was selected at the time of merge is preserved.
Please look into it and let me know if you need any other detail regarding the same