This is also called Panoramic merge. For me, the purpose was to join parts of a large marksheet, which unfortunately was not in A4 size, and hence could not be scanned by my SOHO scanner. Hence I had scanned three different parts of the huge image, and needed to combine them together into a single image.
The correct function to use in Photoshop is File>Automate>Photmerge (Photoshop CS6). Unfortunately, my Photoshop crashed when I used that function. So I searched for and found another function that did the same thing, even better.
Open the images you want to merge.
Create a new image with size larger than each. This canvas can be reused for multiple tasks.
Now, copy and paste each image to be merged, within the larger canvas.
Select all images, and then use: Edit>Autoalign layers>Perspective
This will create a fused image with correct dimensions. Save the file as some name. Redo the task.