The Governor is legit mad at Merle. Merle lied about killing Michonne, and she came back to kill his daughter & make him a cyclops. Merle is the scapegoat, and the Governor knows Merle's too close to this other group to be trusted. I think Merle & Daryl, Rick's group, and Tyrese's group will inevitably join forces out of necessity just to defend the prison against the Governor's forces. They may not like each other but it'll be about survival. Andrea's allegiance is still up in the air for me.