Most developers understand the benefits of writing reusable code. It makes sense to use that piece again when you need the same functionality. The more pre-tested software you can reuse, the fewer bugs you’re likely to have in the final product.
Merge modules extend the notion of reusable components to the software installation process. Once you’ve developed a way to install a reusable component, you can also reuse the installation process!
This article explains the Merge Modules, the need of it and How to merge them to an existing installer file (.msi).