Merlin Cycles of Leyland, Lancashire was set up in 1992, whereas Merlin Metalworks of Cambridge, Massachusetts started up in 1986. You would have thought that the US Merlin would have been well enough known by 1992 for the folks in Leyland to have chosen another name, but 1992 was another era and I suppose it is possible that news of Merlin Metalworks hadn't reached Leyland yet. Clearly also, Merlin Metalworks can't have registered its name in the UK at that time, otherwise I think they could have forced Merlin Cycles to change its name.
To be fair to Merlin Cycles, I don't think they have ever tried to trade off the reputation of the US Merlin and they pay Paul Sadoff for their use of the Rock Lobster name. It is quite a strange situation though.