The code is very easy to read. It looks just like the code you edit in the Smalltalk IDE.
It’s no harder to merge than in any other language. You basically employ the same techniques.
Smalltalk offers many different source code control options, depending on the Smalltalk dialect. Instantiations’ VA Smalltalk comes with the highly-regarded ENVY source code control system. Pharo comes with Monticello. Cincom’s VisualWorks comes with SCM (source control management). But Git is at least fairly universal.