Not sure if merging is the right way to describe it - but it seems like Hitoshi Yamagami moved on and vacated the position. In turn, Nintendo may have restructured the assistant producers of EPD Group 1 to work under EPD Group 2, while potentially a new/different set of personnel take charge of EPD Group 1.
You would think that EPD Group 1 probably is going to be an internal development team since all the external coordinators were moved out of the group. I would assume that one of the co-teams from the bigger EPD groups (like 4/10/5) house this new group under a successful IP -- or Nintendo assembles a new group entirely based on promising talent.
IP/Team based to restructure Group 1
- AC and Splatoon team splitting up so one team comes over to Group 1.
- Switch Sports or Fitness team leave Group 4 to head Group 1.
Talent/Personnel to restructure Group 1
- Yusuke Amano kicks off new IP
- Tsubasa Sakaguchi kicks off new IP