Im playing as Union (version 1.06b) in the "1861 april campagin" and have sent Burnside to Kansas to help stop the CSA incursions in the area. I also have some california troops there but no matter how much I try to drag-and-drop those units on Burnside they wont merge with him, although a unit of californians did merge with him when they moved into the same region as him, I on purpose did target the unit on Burnside. Both the california unit and Burnside have CP and Burnside even have formed a division with that unit of californians that did merge with him. I have some problems with having other units merge with californian troops or troops in Kansas or Indian territory, but that is yet unconfirmed as the unit is under construction still.
Got savegame if AGEOD wants one when they get back from vacation.