This article deals with the interaction of co-rotating vortices, in configurations similar to those found in the extended near-wake of typical transport aircraft. The fundamental process of vortex merging is analyzed and modeled in detail in a two-dimensional context, giving insight into the conditions for merging and its physical origin, and yielding predictions for the resulting flow. Three-dimensional effects, in the form an elliptic short-wave instability arising in the initial co-rotating vortex flow, are described and analyzed theoretically. They are found to cause significant changes in the merging process, like earlier merging and larger final vortex cores. Illustrations from recent experimental, numerical and theoretical studies are given, and the relevance of the results for applications to real aircraft wakes is discussed.