How to merge and transcode multiple videos
Merge & Transcode in Windows
If you have more than one source files that need to be merged and transcoded resulting in a single out put file create a batch script with the following line in it:
C:\Program Files\VideoLAN\vlc\vlc.exe -vvv d:\my movies\pirate1.avi pirate2.avi --sout-keep --sout=#gather{} --sout=#transcode{vcodec=divx3,vb=1024,scale=1,acodec=mp3,ab=192,channels=6}:standard{access=file,mux=ts,dst=out.avi} --sout-all
PATH_TO_VLC is vlc on linux, C:\Program Files\VideoLAN\vlc\vlc.exe on Windows, but that can change depending on the installation.
Next edit the path to vlc, input files, and transcode peramiters to meet your needs.