Since MS wants to aquire Github which owns Atom, what do you guys think would happen to one of the largest rival of VSCode?
Would they merge them? Or github guys would separate it from the company before the sale?

For the 100th time: I don't think they're got to disolve or merge atom.

There's a tool manufacturing company named Stanley Black and Decker. They make tools under the following company names: Stanley, Black and Decker, and DeWalt.

It's not that uncommon for a company to own subcompanies in the same industry.