VMS Help MERGE, Output File Qualifiers, /INDEXED_SEQUENTIAL, Full Description  *Conan The Librarian (sorry for the slow response - running on an old VAX)

    If the organization of the output file is to be different
    from that of the input files, then you must specify the
    new organization. Use the /INDEXED_SEQUENTIAL qualifier to
    define indexed-sequential organization for the output file.
    Additionally, the output file must exist and must be empty, and
    you must use the /OVERLAY qualifier.