In addition to the relegation issues that other people have brought up, your proposal would still have a top league where managers from different countries would have to compete with each other. There have already been a couple of managers from these countries stating that this is unacceptable. How do you solve this?
Well, your original plan was to simply combine all three nations. So this would cut down that problem to 16 teams only. Other 100+ teams would still be playing with their countrymen.
Also, I believe it's likely that top teams care less about nationality issues, than more casual managers. I mean if you like the game, and you're active on forums, you're more likely to enjoy the challenge of playing in the stronger league. I'm taking myself as an example. I'm very active on this game, and have no intention of quitting, if this merger happens. Now if you lump all three countries together, I'm pretty sure a lot of more casual managers will quit.
As for promotion/relegation, do you think it would be a problem?
Div I relegation: as usual
Div II promotion: as usual
Div II relegation: as usual
Div III promotion: depends on the number of slots in Divs II, but aren't there systems for Utopian IV to III promotion, and also bot promotion who address the same issue already?