HI,
There is a chance that when you merge two pets you will not advance to the next tier (generation, level, etc). So you might have 2 T4 pets and try to make a T5 pet but if it fails you only now have one T4 pet. If it succeeds, congratulations on the new tier 5 pet but it sounds like you tried and failed. Sorry.
Also, you have control over the skills you may want to keep or you can also choose to just abandon the skills and get a new random assignment of skills.