Merges

Merges are achieved through combining two barrels (Barrels give Scrap) which are identical. This will make a better one (Each time you get a better one you get 3x Scrap than with the previous one). This is the key to go further in the game.

Benefits of Merging
As stated above, Merges allow you to go further. If you didn't merge, you wouldn't get Golden Scrap (in very low levels, 0-4 Stars) or at 10+ Stars you wouldn't get the Magnets you need to upgrade them, or at 100+ Stars you wouldn't get Wrenches to buy more Tree Upgrades/upgrading Scrapyard v4.

The more you merge, the faster you'll progress (not true at 5 to 10 Stars, from then true)

In Teams
You can contribute your Team by merging to reach the maximum Magnets (achieved with 500,000 merges among all the members of the Team) by the end of the week and for having a better ranking in the Team Merges Leaderboard (Merges reset every Monday at 00:00 (Germany time)). There is a Team Challenge which explicitly says you to merge, and other one about collecting Mega Magnets, which need merges to appear.

To Level Up
Level Up is the main source of Magnets, especially at 10+ Stars (if you have Faster Level Up at 20, otherwise max it as soon as possible). You need to merge to get more Levels. The higher the level the higher merges you'll need. Level Ups reset by Prestige or upgrading Brick's income.